In this article, we’re going to dig into a few alternative types of deeds used for specific purposes, as well as highlight what states offer these deeds. While the majority of transactions will use the more common deed forms, these may come up in your transaction and it is important to know what they are and how they work.
A gift deed is exactly what it sounds like: a deed used when one party gives real property to another. The major difference between gift deeds and others is that there is no exchange of consideration. The grantee (or donee) gives nothing in exchange for the property, but legally it is still considered a conveyance.
A grant deed is a particular type of deed, also known as a bargain or sale deed. It is the most basic deed form other than a quitclaim deed, containing only the basic information necessary to convey the title. You can learn more about basic deed elements here.
Unlike a warranty deed, a grant deed does not explicitly provide protection against encumbrances, such as easements, or claims on the title by third parties. Instead, the grant deed implies that the grantor owns the property. Additionally, grant deeds also imply that the property is not encumbered in any way that has not been disclosed to the grantee by the grantor before conveying the title.
These implications are the major difference between grant deeds and quitclaim deeds. The grantor is implying ownership of title, whereas quitclaim grantors are not implying or guaranteeing anything.
A mineral deed grants all the oil, gas, and other mineral rights to the grantee. In this case, the grantee gains full ownership rights over those materials, including the right to obtain them from the land. This also means the grantee has the right to all royalties and other payouts from those materials.
The grantor maintains all other rights to the property, subject to the grantee’s right to access the land for mining or drilling purpose.
This is a particular kind of gift deed limited to spouses. This deed is used in cases where each spouse holds an interest in a property, and one spouse intends to give the spouse’s rights to the other,.
The interspousal transfer grant deed is most commonly used in divorce in order to effectuate a divorce settlement or decree. It may also be used in refinancing situations where one spouse has poor credit. Even in such situations, however, the grantor spouse loses all rights and title to the property following the transfer.
A transfer on death deed is a non-testamentary estate planning tool. In plain english, that means that in certain states owners of property have the right to create a deed that would transfer a property when they die outside of the will or probate process.
The grantee gets no rights to the property at the time the deed is made and recorded. Instead, they have the future right to receive the property on the grantor’s death. The grantor maintains all current rights, including the right to revoke the transfer on death and/or sell or otherwise transfer the property.
The grantee does have the right to transfer or otherwise encumber the grantee’s future interest, but not the property itself, until the death of the grantor.
There is a possible scenario in which the grantee quitclaims the grantee’s interest to a third party who never receives the property because the grantor revokes the transfer on death. This is another reason to understand your deed thoroughly any time you’re purchasing a property.
There are several more deed forms for even more niche situations specific to particular states. If you are presented with a deed form that you do not recognize, you should ask as many questions and find as much information as possible to ensure that you know exactly what rights and restrictions you have.
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