Deeds: Valid Elements, Delivery and Types

Essential Parties and Valid Elements of a Deed

A deed is a written legal instrument used to transfer title to real estate from a grantor to a grantee. In real estate transactions, the grantor is the party conveying real property, while the grantee is the party receiving it. For real estate salespersons operating under the guidance of a supervising broker, recognizing the basic requirements of a valid deed is a fundamental competency. To execute a valid deed, the grantor must be of legal age and possess sound mental capacity. If a deed is executed by a person adjudicated legally incompetent, it may be void or voidable, depending on state law and the specific circumstances. Similarly, a deed executed by a minor is generally voidable by the minor upon reaching legal age, subject to state law.

In contrast to the grantor, the grantee does not need to possess legal contractual capacity; for instance, a deed conveying property to a minor child or an incapacitated person can still be valid. However, the deed generally requires an identifiable grantee. A deed naming a wholly nonexistent grantee may be ineffective, though a name or description that identifies a real person can suffice. Although many deeds recite valuable consideration, such as money, or good consideration, such as love and affection, a consideration recital is generally not required for a valid deed.

A valid deed must contain a granting clause, also known as words of conveyance, demonstrating the grantor's present intent to transfer title. Many deeds also include a habendum clause, which typically begins with the words 'to have and to hold' and defines the type and extent of the estate being conveyed. A deed is interpreted as a whole to determine the grantor's intent, and how an irreconcilable conflict between its granting and habendum clauses is resolved varies by state. Additionally, a valid deed must contain an adequate legal description that uniquely identifies the land being conveyed. Real estate professionals must remember that an informal street address alone is generally legally insufficient as a property description in a deed.

The deed should also identify any restrictions, reservations, or easements the grantor intends to impose or expressly except from the conveyance. However, existing recorded interests may affect title even if they are not restated in the deed. To be legally effective, the deed must be signed by the grantor. The grantee generally does not need to sign the deed, although a separate agreement or applicable law may require the grantee's signature if they are assuming specific obligations, such as a mortgage debt. To qualify for recording, a deed generally must be acknowledged or satisfy another proof-of-execution method permitted by state law. While acknowledgment is typically required to record a deed in the public records, an unacknowledged deed can still be valid between the parties, depending on state law.