What Is a Deed?

A deed is a signed legal document that grants its holder specific rights to an asset—provided they meet a number of conditions. Deeds are most commonly used to transfer the ownership of automobiles or land between two parties.

Key Takeaways

  • A deed is a signed legal document that grants its holder specific rights to an asset—provided they meet a number of conditions.
  • A deed is most commonly used to transfer the title of an asset to a new holder, granting them the privilege of ownership.
  • The deed is the vehicle for transferring a title—not the title itself.
  • If the deed is not written, notarized, and entered into the public record, it could be vulnerable to legal challenges.

Understanding a Deed

The purpose of a deed is to transfer a title, a legal document proving ownership of a property or asset, to another person. For the document to be binding in a court of law, it must be filed in the public record by a local government official tasked with maintaining documents. The signing of a deed must be notarized and, depending on state laws, may require witnesses.

If the deed is not written, notarized, and entered into the public record, it can be referred to as an imperfect deed. The document and the transfer of title are still valid, but the related paperwork may need to be cleared up with the state if there is a legal challenge.

Other types of documents that confer privileges comparable to deeds include commissions, academic degrees, licenses to practice, patents, and powers of attorney.

The register of deeds is available for public viewing and is usually maintained on the town, county, or state level.

Deed Types

There are many different types of deeds, each of which serves a different purpose. They are generally categorized in the following ways:

  • Grant deed: This type of deed contains two guarantees: that the asset has not been sold to someone else and that it is not burdened by any encumbrances, such as outstanding liens or mortgages, that have not already been disclosed. Grant deeds do not necessarily need to be recorded or notarized, although it is generally in the best interests of the grantee to ensure that this is done.
  • Warranty deed: This document provides the greatest amount of protection. A warranty deed offers the same guarantees as a grant deed, together with a promise that the grantor will warrant and defend the title against claims.
  • Quitclaim deed: This kind of deed releases a person's interest in an asset without stating the nature of their interest or rights. The grantor could be a legal owner, or not, and makes no promises. Quitclaims are often used in divorce settlements. 

Deed Limitations

The transfer of ownership can be muddled even when a perfected deed is filed. There could be a cloud on title for a variety of reasons. False deeds might be filed that require clearing up with record keepers. Alternatively, there may also be probate issues. For example, if the owner of a property passed away without defining in a will who should gain control of their estate, heirs might challenge one another in court for the property title.

Moreover, conferring a title through a deed does not necessarily grant the new owner the right to use the property in any way they choose. An individual who signs a deed for a particular section of land has a legal right to possess that land, for example, but may not be able to build a shooting range on it because of the potential risk it would pose. 

In other cases, the holder of the title to a piece of property may be able to own the land but for environmental reasons would not be allowed to develop it.