When you finally receive the deed to your new house, it’s an exciting moment – the deed represents legal proof that you officially own the property. But then the question arises: as the homeowner, who should actually keep possession of the physical deed document? This article will provide a comprehensive look at house deeds – what they represent, the different types, and most importantly, guidance on deed possession and recording best practices.
What is a House Deed?
A house deed is a legal document that identifies the rightful owner of a property. It provides critical proof of legal title and ownership rights. When a house changes hands from a seller to a buyer, a deed must be signed by both parties to legally transfer ownership. The deed gets recorded with the local county recorder’s office to update public records.
So in essence a deed represents the legal paper trail showing the chain of ownership. Having the proper, updated deed can prevent disputes over legal ownership.
Types of House Deeds
There are a few common types of deeds used in real estate transactions:
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General Warranty Deed: This provides the highest level of protection for the buyer. The seller guarantees they have full right to sell the property and will be liable for any title defects.
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Special Warranty Deed The seller only warrants against defects arising during their ownership, not before. Less protection for buyer.
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Quitclaim Deed: Provides the buyer no protections against title defects. Seller releases their ownership claim but makes no promises about the title validity.
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Transfer-on-Death (TOD) Deed: Allows a property owner to directly transfer ownership to a beneficiary upon death without need for probate.
The type of deed used depends on the specific situation. Buyers typically want a general warranty deed, while quitclaim deeds are more often used in estate planning gifting scenarios.
Who Physically Keeps the Deed?
When a property changes hands, best practice is for the buyer to take physical possession of the deed document. This represents their ownership and right to the property. The deed should be kept in a safe, secure location with other important documents.
However, there’s a catch – most buyers don’t fully own their home until the mortgage is 100% paid off. So during that time, the lender often retains physical possession of the deed as collateral, even though the buyer resides there. Once the mortgage is satisfied, the lender transfers the deed to the homeowner.
If you own your home outright with no mortgage, you or your lawyer will maintain possession of the deed. It’s critical that sellers sign over the deed to buyers to legally transfer ownership.
Recording the Deed is Critical
While physically possessing the deed is important, it doesn’t tell the full story. The deed must also get recorded with the county recorder’s office to update public records. This shows the chain of ownership and prevents disputes.
When a property is sold, the new deed recording lets the public know ownership was legally transferred. And the buyer can easily access and view the deed on public record anytime.
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The physical deed possession represents ownership rights
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But recording the deed with the county makes it “official”
Keeping your deed updated and recorded is essential, especially when transferring ownership. Consult your real estate attorney and local county office for guidance when recording property deeds.
Special Cases of Deed Possession
There are a few unique cases where deed possession diverges from the normal process:
Inheritance: When property passes to an heir after death, the executor or estate attorney handles the new deed filing. Once recorded, they transfer possession to the beneficiary.
Divorce: If married owners divorce, ownership gets transferred to one spouse via a new deed. Both parties must sign.
Living Trust: If property is owned by a trust, the trustee keeps the deed but beneficiaries are named as having an ownership interest.
Life Estate Deed: Allows a senior to transfer a remainder interest to heirs but retain lifetime usage. The owner keeps the deed while living on the property.
Proper deed possession and recording ensures smooth ownership transfers in these unique situations. Rely on real estate and estate planning attorneys for guidance on deed handling.
A deed is more than just a piece of paper – it legally represents your rights as a property owner. Make sure your deed stays securely in your possession, except for special cases like an unfinished mortgage. And be diligent about properly recording any deed changes and transfers with your local county office. Keeping your deed updated provides critical legal protection as a homeowner. Consult real estate professionals for guidance when buying and selling property to ensure your deed is handled correctly.
Special Purpose Deeds
Special purpose deeds are used with court proceedings and instances where the deed is from a person acting in an official capacity. Most special purpose deeds offer little to no protection to the grantee and are essentially quitclaim deeds.
Types of special purpose deeds include the following:
- Administrators deed: This may be used when someone dies intestate (without a will). A court-appointed administrator will dispose of the decedents assets, and an administrators deed may be used to convey the title of real property to the grantee.
- Executors deed: This may be used when a person dies testate (with a will). The estates executor will dispose of the decedents assets, and an executors deed may be used to convey the title or real property to the grantee.
- Sheriffs deed: This is given to the successful bidder at an execution sale held to satisfy a judgment obtained against the property owner. The grantee receives whatever title the judgment debtor has.
- Tax deed: This is issued when a property is sold for delinquent taxes.
- Deed in lieu of foreclosure: This is given by a borrower who defaults on a mortgage directly to the lender. This prevents foreclosure proceedings; the loan is terminated if the lender accepts the deed in lieu of foreclosure. Many lenders prefer to foreclose to clean up the title.
- Deed of gift (gift deed): This is used to convey the title to real property that is given for no consideration or only a token consideration. (“Consideration” is the legal term for something of value exchanged in a contract.) In some states, the gift deed must be recorded within two years, or it becomes void.
General Warranty Deed
The general warranty deed offers the grantee the most protection. With this type of deed, the grantor makes a series of legally binding promises (called covenants) and warranties to the grantee (and their heirs) agreeing to protect the grantee against any prior claims and demands of all persons whomsoever in regards to the conveyed land.
The usual covenants for title included in a general warranty deed are as follows:
- Covenant of seisin: The grantor warrants they own the property and has the legal right to convey it.
- Covenant against encumbrances: The grantor warrants that the property is free of liens or encumbrances, except as specifically stated in the deed.
- Covenant of quiet enjoyment: The grantee will have quiet possession of the property and will not be disturbed because the grantor had a defective title.
- Covenant of further assurance: The grantor promises to deliver any document necessary to make the title good.
Title vs. Deed: Don’t Get These Legal Concepts Confused!
FAQ
Who holds the deed to a house?
You, as the homeowner, typically hold the house deed to your property, even with a mortgage. The house deed and mortgage are separate legal documents with different purposes. A deed proves ownership and transfers title, while a mortgage is a loan agreement.
Where do most people keep the deed to their house?
A safe you can bolt down or attach to a solid wall is a great place to keep house deeds. This way, the safe cannot leave your house in case of a burglary. Just make sure it is properly installed.
How do I get the deed to my house after closing?
Go to the recorder’s office or county clerk’s office. You’ll be able to get your deed and the satisfaction of mortgage. Those are the 2 docs you want.
Who keeps copies of deeds?
You will find a recorded deed through the local county government office in which your property is located. The correct office or division will vary from county to county, but it is typically along the lines of your county register, registrar, clerk, or recorder’s office.
Who is the rightful holder of a house deed?
When a house is owned free-and-clear, the homeowner is the rightful holder of the deed. However, if the homeowner is still paying a mortgage, then they do not fully own the house yet. In this case, the mortgage lender technically holds the deed. House deeds define the ownership of a house.
Who holds a title deed if you have a mortgage?
The title deeds to a property with a mortgage are usually kept by the mortgage lender. They will only be given to you once the mortgage has been paid in full. But, you can request copies of the deeds at any time. Who holds the deed when there is a mortgage?
Why are house deeds important?
House deeds are important because they show who has legal ownership interest in a property. When a home is sold, the grantor must provide the house deed to the grantee, who’ll likely conduct a title search to be absolutely certain the property has no liens on it.
What is a house deed & how does it work?
A house deed is the legal document that transfers ownership of the property from the seller to the buyer. In short, it’s what ensures the house you just bought is legally yours. How do you prove you own a house? Proving Ownership. Get a copy of the deed to the property.
What do you need to know about house deeds used in real estate?
Trust & Will explains that a house deed is a written document that identifies the legal owner of a specific property. When someone buys a house, both the buyer and the seller must sign a deed. This information is important to know about house deeds in real estate.
What happens to a deed when you sell a house?
You will continue to hold the deed to your property, which is now free and clear of the mortgage lien, solidifying your complete ownership. The end of the mortgage agreement doesn’t change who holds the deed; it just removes the lender’s claim. When you sell your house, you will transfer the deed to the new buyer.