To handle even the most simple real estate transactions, attorneys must have a basic understanding of the law of deeds. Two of the most common types of deeds are the warranty deed and the quitclaim deed. This article will explore the differences between warranty and quitclaim deeds, the elements of deeds in general, the necessity of having deeds notarized and recorded, and the elements of recordation.
There are two types of warranty deeds: general and special. Illinois statute 765 ILCS 5/9 sets forth a form for the general warranty deed. Deeds of conveyance made in substantially the same statutory form are deemed a conveyance in fee simple to the grantee, the grantee's heirs and assigns, with covenants on the part of the grantor unless the deed contains words of limitation.
General Warranty Deeds
If a deed is intended to be a general warranty deed, it should contain the phrase "conveys and warrants" as provided in the statutory form. The use of this statutory form binds the grantor to several covenants that do not need to be specified in the deed. First, the grantor warrants that the grantor is the lawful owner of an indefeasible interest in the estate at the time the deed is made and delivered and that the grantor has the right to convey the property. Second, the grantor warrants that the property is free from all encumbrances. Third, the grantor warrants that he or she will defend title to the estate so that the grantee and the grantee's heirs and assigns may enjoy quiet and peaceable possession of the premises with the power to convey the property.
The general warranty deed also conveys after-acquired title to the grantee. 765 ILCS 5/7. Under the doctrine of after-acquired title, if a grantor attempted to convey title to land that he or she did not in fact own, but later obtains the legal title to that property, the property is held in trust for the prior grantee, and the conveyance is treated as if the grantor owned the legal estate at the time of the conveyance.
Special Warranty Deeds
In contrast to a general warranty deed, a special warranty deed limits the liability of the grantor by warranting only what the deed explicitly states. According to Ward on Title Examinations, "A special warranty deed has practically the same effect as a quitclaim deed." Special warranty deeds are generally used by corporations or other entities that want to avoid assuming the liability of a general warranty deed. Like the general warranty deed, the special warranty deed should contain the language "conveys and warrants." Usually, the grantor warrants that he or she did nothing to impair title during the period the grantor held the title. While a special warranty deed may contain covenants of title, these covenants will usually cover only those claims arising by, through, or under the grantor.
Quit Claim Deeds
Illinois statutes also set forth a form for the quitclaim deed. 765 ILCS 5/10. A deed in substantially the same form as that set forth in the statute, a quit claim deed conveys to the grantee and the grantee's heirs and assigns in fee all of the legal or equitable rights the grantor has in the property that existed at the time of the conveyance. As provided for in the statute, quit claim deeds should contain the language "convey and quit claim."
Differences
As discussed above, there are several important differences between warranty deeds and quitclaim deeds. Two of those differences merit further mention. First, attorneys should remember that the quitclaim deed does not include the types of warranties provided under a general warranty deed. A quitclaim deed merely conveys to a grantee all the right, title, or interest the grantor has in the described premises. Second, the quitclaim deed does not convey after-acquired title to the grantee unless such intention is expressly stated in the deed. 765 ILCS 5/10.
Deed Requirements
Although warranty deeds and quitclaim deeds contain noticeable differences, there are several elements common to all deeds. The first common requirement is that the deed must be in writing and signed by the grantor(s). 765 ILCS 5/1. Generally, deeds conveying a homestead estate must also be signed by the grantor's spouse, except where one spouse conveys to the other. A few other exceptions to this rule are set forth at 735 ILCS 5/12-904.
In addition to the signature of the grantor(s), deeds should be acknowledged. Even though Illinois law does not require acknowledgement, 765 ILCS 5/20 provides several ways to acknowledge a deed, including acknowledgement before a notary public. See also 765 ILCS 5/31. Even though an unacknowledged deed is a valid conveyance, there are several reasons to properly acknowledge deeds. First, the unacknowledged deed cannot be read into evidence without further proof of execution. 765 ILCS 5/31, 5/35. That is, an unacknowledged deed is not self-proving. Courts will not accept that the signature on the deed is authentic without evidence to that effect. In addition, title insurers may refuse to rely upon an unacknowledged deed for the purpose of insuring that title is vested in the name of the grantee under the deed.
The second common requirement for both warranty and quitclaim deeds is that the deed must contain operative words of conveyance showing intent to transfer present title. As previously discussed, the words "conveys and warrants" are statutory words of conveyance that include covenants of warranty. 765 ILCS 5/8, 5/9. While the words "convey and quit claim" are also statutory words of conveyance, they do not include any covenant of warranty. 765 ILCS 5/10. Along with these words of conveyance, a deed also must identify with reasonable certainty the real estate to be conveyed. Glen View Club v Becker, 113 Ill App 2d 127, 251 NE2d 778 (1st D 1969). Unless otherwise specified, Illinois courts assume that the grantor is conveying an estate in fee simple. 765 ILCS 5/13.
The third common requirement is that the names of the grantor and the grantee should appear on the deed, and a recital of at least nominal consideration should be provided. Consideration is not required for a deed to be valid. 765 ILCS 5/9, 5/10, 5/35. However, a deed without consideration may be void if there are creditors' interests involved. Effingham State Bank v Blades, 139 Ill App 3d 259, 93 Ill Dec 764, 487 NE2d 431 (5th D 1985).
The fourth common element is that the deed must be delivered and accepted to be an effective conveyance. In re Estate of Shedrick, 122 Ill App 3d 861, 78 Ill Dec 462, 462 NE2d 581 (1st D 1984); Parker v Roberts, 408 Ill 159, 96 NE2d 533 (1951). Although manual transfer of the deed from the grantor to the grantee may effect delivery, it is not necessary to constitute delivery. A deed delivered to a third person may also constitute delivery under certain circumstances. Courts have validated delivery to a third party when the deed is beyond the grantor's control, Smith v Pelz, 384 Ill 446, 51 NE2d 534 (1943); when the deed is not given to the third party merely for safekeeping, Calcutt v Gaylord, 415 Ill 390, 114 NE2d 340 (1953); when the third party is given directions to deliver the deed, Newman v Youngblood, 394 Ill 617, 69 NE2d 309 (1946); and when the grantor cannot re-call the deed, Alexander v American Bible Soc., 407 Ill 49, 94 NE2d 833 (1950).
It is also worth noting that if the grantee possesses the deed, Illinois law creates a presumption that the deed has been delivered. Layton v Layton, 5 Ill 2d 506, 126 NE2d 225 (1955). However, it is important to remember that delivery alone is not sufficient to make the deed effective. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept.
Finally, deeds should be recorded in the county in which the real estate is located. 765 ILCS 5/28. 55 ILCS 5/3-5018 details the fees that the recorder can charge for this service. Although a deed does not have to be recorded to be a valid conveyance, there are practical reasons for recording a deed. Deeds do not take effect as to creditors and subsequent purchasers without notice until the instrument is recorded. Thus, unrecorded deeds are void as to all subsequent creditors and subsequent purchasers without notice until they are filed for record. 765 ILCS 5/30. Recording a deed places subsequent purchasers on constructive notice in that subsequent purchasers are deemed to have actual knowledge of any recorded instrument. 765 ILCS 5/31. Additionally, because Illinois is a "race-notice" state, the first grantee without notice to record a deed to property will be protected against the interests of other grantees with unrecorded deeds to the same property.
Recording of Deeds
For a deed to be properly recorded or registered, it must comply with specific statutory requirements. Failure to comply with the following requirements, except possibly for the requirement of compliance with the Plat Act, will not invalidate a deed. A deed must contain the names of the parties typed or printed to the side or below the signatures. This includes grantors as well as any witnesses and persons taking the acknowledgements. 765 ILCS 5/35c, 765 ILCS 5/9, 5/10. The name and address of the grantee or grantees must appear on the face of the deed. 55 ILCS 5/3-5026. Also, a deed must include the name and address of the person or persons to whom the subsequent tax bills are to be sent and to whom the instrument is to be returned. 765 ILCS 5/35c; 55 ILCS 5/3-5020.5. A deed should have a blank space of 3 ½ by 3 ½ inches for use by the recorder. 765 ILCS 5/9, 5/10.
Some counties require that a deed show the real estate index number (Permanent Identification Number) of the parcel or parcels conveyed by the deed. If a metes and bounds description is used in the deed, the deed should comply with the relevant sections of the Plat Act. 765 ILCS 205/0.01 et seq. At a minimum, the recorder may require an affidavit be attached to the deed, certifying that the conveyance does not violate the provisions of the Plat Act. 765 ILCS 205/5a. In addition, a deed with a metes and bounds description must contain the section, township, and range with an identifiable point of beginning. Subsequent courses must contain approximate linear distance and direction values relative to one of several known courses or lines. 765 ILCS 5/35c. Also, recorders may refuse to record a deed unless the name and address of the person who prepared the deed is printed, typed, or stamped on the face of the deed. 55 ILCS 5/3-5022.
