The most desirable form of deed of conveyance is known as a warranty deed. A warranty deed expressly promises or guarantees that the seller has clear title—that there are no known liens or encumbrances held by any other party. Accordingly, the seller also acknowledges that, should any “clouds” appear on the title—unknown liens or ownership interests—the seller will compensate the buyer for loss of value. Warranty deeds also include a number of other promises by the seller.
A grant deed passes title and interests, but does not expressly warrant that there are no liens or encumbrances. Generally, it promises that the property has not already been transferred to another person, and that the only known liens and encumbrances are in the deed.
When there are liens or encumbrances—clouds on title—a seller may still transfer ownership, but the buyer will take the property with the liens and encumbrances still on the property. In these situations, it is typical for the seller to execute a quitclaim deed. The quitclaim deed includes no implied or express covenants of title/ownership, but only passes that interest currently held by the seller. Quitclaim deeds are often used within families to pass property from generation to generation.
If you are named on a deed as a “joint tenant,” i.e., if you own real property jointly, when one of the parties dies, all other joint tenants become the sole owners. A deed is not required to legally pass ownership interest of property held as joint tenants when one of the joint tenants dies.
If, however, you own property with another person as “tenants in common,” you may pass the property to your heirs upon your death.
The way to take property as joint tenants or as tenants in common is to specify that type of ownership in your deed. In most states, if you don’t specify that property is held in a joint tenancy, it is held as tenants in common.
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