UNDERSTANDING DEEDS
If you are the owner of a piece of property, you acquired the property by a deed, which gives you title and ownership of the property. Are there different kinds of deeds? Yes there are.
General Warranty Deed – This type of deed guarantees a clear title to the buyer of property, who is warranting to the seller that they own the property, have the right to sell the property, that the property has no encumbrances other than the ones stated, that the seller will defend title against all claims by all persons, including persons claiming ownership prior to the seller’s ownership. This is the traditional form of deed in a transaction between two unrelated parties and the strongest form of deed that a buyer can obtain because of all the guarantees, including clear title prior to even the current seller’s ownership of the property. Regardless, a buyer should always do their due diligence with respect to the property and perform a title search.
Special Warranty Deed – Similar to a General Warranty Deed but not as strong, because here the seller only guarantees the property is free of encumbrances except as noted but only warrants to defend title against persons making claims under the seller’s ownership, not prior to seller’s ownership.
Quitclaim Deed – This type of deed does not contain a guarantee of clear title to the grantee (the person receiving title to the property). Transfer of ownership with this type of deed is most common between family members or spouses. For example, husband owns a piece of property prior to marrying wife and wants to transfer part ownership to wife. In that case, husband would be the grantor (the person transferring title) and husband and wife would be the grantees. These deeds are often mistakenly referred to as “quick claim”.
Beneficiary Deed – This is a deed which transfers ownership of a property after the owner passes away. Conceptually, it is similar to a beneficiary designation on an insurance policy. However, unlike other deeds, it must be recorded prior to the death of the owner. If so, the property will avoid probate. Only about half of the states allow these types of deeds and luckily Missouri is one of them. It is specifically authorized by statute (RSMo. §461.025). These deeds are commonly used in an estate planning, since they accomplish the goal of avoiding probate with your home. These deeds do not affect title and become void if you sell the property (i.e. you’ll need a new beneficiary deed if you buy a new home).
Deed of Trust – A deed of trust is the recorded document by which a lender takes a security interest in a property. It gives the lender the right to foreclose on the property if the borrower does not make payments on the loan. It is not exactly a mortgage but very similar, although the term “mortgage” is commonly used in Missouri when people are actually referring to a deed of trust.
Deed of Release – A lender records this deed once a deed of trust has been paid in full by a borrower. In fact, under Missouri law, a lender has 15 days to record a deed of release from the borrower paying off the loan and making a formal request for one. (RsMo. §443.130)
Deeds are recorded at the Recorder of Deeds office. In St. Charles County, the Recorder of Deeds is located in Room 388 of 201 North Second Street in St. Charles, across the street from the courthouse and jail.
