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THE TYPES OF DEEDS UTILIZED IN FLORIDA REAL ESTATE TRANSACTIONS

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There are essentially four basic types of deeds in Florida and a few additional specialized ones based off those four. Those four basic types of deeds, in order of diminishing benefit to the Grantee, are: the Warranty Deed, the Special Warranty Deed, the Fee Simple Deed, and the Quit Claim Deed. Furthermore, you have the specialized Deeds such as Personal Representative’s, Trustee’s, Guardian’s, and Life Estate Deeds.

All of the above deeds, except the Quit Claim Deed, expressly convey fee simple ownership of property. “Fee simple” means full and complete ownership of property which can be inherited by the owner’s heirs or devised by the owner’s will or trust to the owner’s beneficiaries. Therefore, fee simple ownership of property does not terminate upon the owner’s death and is more than a mere right of possession like a lease gives a tenant.

The General Warranty Deed.

The General Warranty Deed is the most common deed used in the sale of residential properties. It is one of deeds called for in the most commonly used real estate contracts: (a) the regular and “AS IS” Residential Contracts for Sale and Purchase, approved by the Florida Realtors® and The Florida Bar, in Paragraph 18.H., and (b) the Contract for Residential Sale and Purchase, approved by the Florida Realtors®, in Paragraph 10. This deed does more than convey fee simple title to the property from the seller to the buyer, it also provides certain “covenants of title”. These covenants are guarantees the seller makes that are enforceable in court by the buyer against the seller, so should one of the covenants or promises be untrue, the buyer can obtain a judgment against the seller for the damages the buyer incurred as a result of the covenant or promise being untrue.

The General Warranty Deed provides five covenants of title:

  1. The Covenant of Seisin: The seller in fact owns the property being conveyed, is the sole owner, and is the only party in possession.
  1. The Covenant of the Right to Convey: The seller has the right to convey the property.
  1. The Covenant Against Encumbrances: The seller asserts that there are no undisclosed or nonvisible encumbrances against the property being conveyed.
  1. The Covenant of Quiet Enjoyment: The seller states that the buyer’s use, possession, and enjoyment of the property will not be disturbed or “disquieted” because of a defect in the title to the property.
  1. The Covenant of General Warranty: The seller will protect the buyer from harm caused by title defects and defend the buyer from any claims by others to the property’s title.

It is important to state that the five covenants of title that a seller gives in a General Warranty Deed are given not only on the behalf of the seller, but on the behalf of all prior owners of the property since the beginning of time. Therefore, if a prior owner breached one of the five title covenants, thus creating a current title defect, the current seller is liable for remedying the defect. This obligation of the seller to correct title defects caused by the prior acts and omissions of previous owners is an important difference between Warranty Deeds and Special Warranty Deeds.

Normally here is where I would insert case law to show an example of litigation involving a General Warranty Deed. However, such lawsuits are not very common anymore due to the providing of title insurance at the closing on the sale of property. Now, buyers file claims with their title insurance companies for damages caused by title defects. Filing an insurance claim is typically easier than (a) finding the seller of the property , (b) filing a lawsuit, (c) winning the lawsuit against the seller, and (d) forcing the seller to pay the resulting judgment. In fact, these difficulties and their costs are the purposes for the conception of title insurance and its current prevalence.

Lastly, it is important to note that the giving of a Warranty Deed by a seller, notwithstanding it having all of the preceding five title covenants, does not guarantee the buyer that the buyer will own the property stated in the Warranty Deed. If a seller does not truly own a property, the Warranty Deed will not convey it to the buyer. While the buyer will have the right to sue the seller for breach of probably all five title covenants and obtain a judgment against the seller, if the seller has no money or other assets with which to pay the buyer, the Warranty Deed with its covenants of title will be of no benefit to the buyer. Therefore, it is important that a buyer require that a real estate attorney or title company perform a title search and provide them with title insurance assuring that, when the seller’s Warranty Deed is recorded, the buyer will have good, marketable title to the property.

There is one special version of the General Warranty Deed.  It is known as the Statutory Warranty Deed is a warranty deed statutorily created by Florida Statutes Sections 689.02 and 689.03. Essentially it is a short-form version of the General Warranty Deed that provides all of the five title covenants of a General Warranty Deed described above.

Section 689.02 provides a form that can be used for a Statutory Warranty Deed. That form effectively reduces the General Warranty Deed’s paragraph providing the five (5) covenants of title into one sentance:

“Grantor does hereby fully warrant the title to the said land, and will defend the same against the lawful claims of all persons whomsoever.”

Section 689.03 then states that the Statutory Warranty Deed shall be held to include all of the common law covenants of title as if the covenants were specifically set out in the deed.

The Special Warranty Deed.

Similar to the General Warranty Deed, the Special Warranty Deed conveys fee simple title and has the same five covenants of title. Where the Special Warranty Deed differs is that the application of the five covenants of title is limited to only the time period during which the seller owned the property. Consequently, if a seller gives a buyer a Special Warranty Deed, and the buyer subsequently discovers that a prior owner breached one of the five title covenants, creating a current title defect, the current seller is not liable for correcting the defect because the seller did not breach the covenant.

The Fee Simple Deed.

With a Fee Simple Deed, like with Warranty Deeds and Special Warranty Deeds, the seller conveys fee simple title, but unlike with Warranty Deeds and Special Warranty Deeds, the seller provides no warranties or covenants of title it simply conveys the fee simple title.

Thus, the Fee Simple Deed has no warranty paragraph or covenants of title. Instead, often only the following statement is in their place:

“The Grantee shall have and hold the said property in fee simple forever.”

The Quit Claim Deed.

Contrary to popular belief, the Quit Claim Deed was not intended, and does not claim, to actually convey any type of ownership in property, much less fee simple ownership. In fact, it contains no covenants of title. The main purpose of a Quit Claim Deed is to serve as a tool to clear the titles to property and eliminate title defects. The offering of a Quit Claim Deed is a releasing and transferring, with or without compensation, by a person who has or might have a claim to some right or interest in a property or its ownership. This is where the name of this deed comes from, because the giver is giving up or “quitting” his or her “claim” to property regardless of what that might be.

Even if the signer or grantor of a Quit Claim Deed is paid, he or she does not guarantee that they are conveying any ownership rights in a property, and, as a result, they have no liability if no ownership rights are conveyed. Basically, a person who signs a Quit Claim Deed is saying that they are not guaranteeing that they own or have a valid claim to any part of the property, or if they do,  they make no guarantee as to what kind of ownership it is, but if they have any ownership or claim, whatever it is, they convey it to you. While a Quit Claim Deed does not give many assurances to its recipient, it has the two defining traits: (1) any interest or claim that the signer or grantor does actually have is conveyed, while (2) the signor or grantor  reassures that they are not taking on any accountability by signing the Quit Claim Deed, regardless of what is or is not conveyed by it.

Special Variations of Deeds.

Personal Representative’s, Trustee’s, and Guardian’s Deeds: Sometimes, persons serving as personal representatives, trustees, and guardians sell and convey the property of others to buyers. Persons in these positions serve in fiduciary capacities. A person who serves in a fiduciary capacity transacts business on behalf of, or handles the money of, others, not for his/her own benefit, but for the benefit of the owners, and the fiduciary must act in good faith and in trust on behalf of the owners. Conventionally, fiduciaries such as personal representatives, trustees, and guardians, are selling and conveying the property of others, of which they typically often have little knowledge and do not personally own. Personal Representative’s, Trustee’s, and Guardian’s Deeds are actually based upon Fee Simple Deeds, and accordingly, typically have no title covenants or warranties since the personal representatives, trustees, and guardians are acting not for themselves, but on behalf of others who are the owners of the property. Since their deeds have no warranties, personal representatives, trustees, and guardians are shielded against being held personally liable by buyers should the properties the fiduciaries convey have title defects. In some instances though, when a real estate contract requires it, a Personal Representative’s, Trustee’s, or Guardian’s Deed can be based upon a Warranty Deed or a Special Warranty Deed, rather than a Fee Simple Deed. These deeds are also referenced in the most commonly used real estate contracts: (a) the regular and the “AS IS” Residential Contracts for Sale and Purchase, approved by the Florida Realtors® and The Florida Bar, in Paragraph 18.H., and (b) the Contract for Residential Sale and Purchase, approved by the Florida Realtors®, in Paragraph 10.

Life Estate Deeds: Life Estate Deeds are also regularly based on the Fee Simple Deed, but can be similar to the Warranty Deed or Special Warranty Deed. These deeds convey property to a person or persons for their life or lives, ending upon his or her death for one person or the last of their deaths for more than one person. This ownership is known as a “life estate,” and it entitles the holder the right to possess, live at, and use the property during their lifetime. The deed goes on to state that, upon the life tenant’s death, the property is then owned by another person or persons in fee simple. The ownership of these people is called the “remainder interest,” and they are called “remaindermen.” These deeds are used for estate planning, both in small estates to avoid probate where a home or other land is the primary asset, and in large estates for the primary residence or homestead where the owner(s) want to hold the legal benefits of homestead while also using living or revocable trusts to avoid probate and possibly estate taxes. Usually, the owner of property will convey his or her own property to himself or herself (and often his or her spouse) for life and convey the remainder interest to his or her heirs.

Sweeney Law, P.A. Has Vast Experience in Drafting,  Reviewing, and Litigating Matters For All Types of Property Deeds

Brendan A. Sweeney, Esq., LL.M., of Sweeney Law, P.A., a boutique firm in Fort Lauderdale, Florida, regularly handles complex transactional and litigation matters throughout Florida. Brendan A. Sweeney, Esq., LL.M. is an AV Preeminent Martindale Rated Attorney, that has been recognized as a Florida Super Lawyer in 2019, Florida Legal Elite in 2019, and as a Florida Super Lawyer Rising Star in 2018, 2017, 2016, 2015, and 2014. If you have any property deed questions and/or issues then contact Sweeney Law, P.A. at (954) 440-3993 immediately to protect your rights. www.sweeneylawpa.com.

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