Good Deeds – A Primer
Whenever property is transferred, a deed is required. What some people may not realize, however, is that not all deeds are the same – in fact, there are several different types of deeds, all of which have very different functions. What may be considered sufficient in one transaction may not meet the requirements of another real estate transaction and, therefore, it is very important to understand what the different types of deeds are and what functions they serve – and, even more importantly, what functions they do not.
Types Of Deeds Allowed In Alabama
Most types of deeds can be used in Alabama. With the exception of the Beneficiary Deed, the following are allowed in Alabama real estate transactions:
- Warranty Deeds – there are two types of deeds that fall into this broader category of warranty deeds. In each, the seller or grantor of the property makes certain covenants regarding the property. With a General Warranty Deed, the seller makes covenants that he or she owns the property and has the right to convey it, that the property is free of any encumbrances unless otherwise noted, and that they will defend title against any claims. The Special Warranty Deed is a similar document, and also conveys interest in property with specific covenants made by the seller with respect to encumbrances and defending title, but only against claims made under the seller.
- Quit Claim Deeds – these deeds are deeds that simply transfer any interest one party has in a piece of real estate to another party. With this type of deed, the party transferring its interest in the property makes no claim that they actually have any interest in the property itself. Quit Claim Deeds are typically useful only in certain circumstances such as transferring property between family members or to remove one spouse’s name from a deed during a divorce and property settlement process.
- Deed of Trust/Deed of Release – Part of the lending process, the Deed of Release cancels out the Deed of Trust. The Deed of Trust is used to give a lender a security interest in a piece of property. If the borrower does not meet payment requirements, the Deed of Trust gives the lender the authority to foreclose and sell the property to recoup their money. This document is usually used along with a loan and promissory note. Once the loan is paid off, the lien holder signs a Deed of Release to cancel the Deed of Trust.
Do I Need An Attorney?
Using a knowledgeable and experienced real estate attorney is not only a wise step to protect your interests, but in Alabama, real estate attorneys are the only ones who can write deeds or documents between sellers and buyers that are actually legally binding. Speaking with an experienced real estate attorney from the beginning steps of your transaction is the best way to ensure your protection.
Cloud Willis & Ellis – Your Real Estate Attorneys
When you need an attorney to handle your real estate transactions, turn to the office of Cloud Willis & Ellis, LLC. Our attorneys have helped buyers and sellers protect their interests with their legal needs during real estate negotiations and transactions and will ensure you are protected as well. Contact Cloud Willis & Ellis, LLC today to meet with our legal professionals.