Title Insurance – What is Title Insurance?
Red Flags – Current Potential Claims
1.Legal Lot
2.Easement – Not shown in Prelim- disclosed on map
3.Divorce Judgments – Lump Sum Judgments and Child support
4.Shell game? Numerous Uninsured Deeds – Quit Claim Deeds
5.Unpaid Trust Deed in favor of governmental agency. Does it go out by time?
Type of Policies:
Preliminary Title Report
Owners Policy – Standard Coverage/ Extended Coverage
Lenders Policy – Standard Coverage/ Extended Coverage
Guarantees – Foreclosure / Litigation
Deeds – Warranty Deed, Special Warranty Deed, Bargain and Sale Deed, Quit Claim Deed
Easements – Creation / Termination
Cannabis – Stewart only local underwriter
Warranty Deeds
As the name implies, a warranty deed conveys a grantor’s interest in the described property and also warrants that the property is free of encumbrances, except those specifically described in the deed. Moreover, a warranty deed conveys the entire interest in the described property as of the date of the deed that the deed purports to convey. It also conveys all after-acquired title and estops the grantor and the grantor’s heirs, successors, and assigns from asserting they had an estate or interest less than what the deed purports to convey.
A warranty deed also includes statutory covenants of title, even though not expressed in the deed. First, at the time of delivery of the deed, the grantor covenants that grantor is seised of the estate in the property that the deed purports to convey, meaning that grantor owns the property (derived from the medieval covenant of seisin), and that grantor has a good right to convey the property. Second, the grantor covenants that at the time of delivery of the deed, the property is free of encumbrances except those specifically set forth in the deed. Finally, the grantor warrants and will defend the title to the property against all persons who may lawfully claim the same. However, courts have declined to enforce this warranty in case of unlawful or frivolous claims.
A grantor must expressly exclude from the warranty deed anything not included in the conveyance. Otherwise, the property conveyed is free of encumbrances if none are set forth in the deed. For instance, if the grantee is taking title subject to an encumbrance or obligation, like a mortgage against the property, the deed must state that the conveyance is subject to that mortgage.
Special Warranty Deeds
Special warranty deeds are the same as a warranty deed with one big exception: the covenant of freedom from encumbrances is limited only to those encumbrances created or suffered by the grantor. Thus, the grantor warrants and must defend the title only against those persons who may lawfully claim the same by, through, or under the grantor. Accordingly, if there was something like a judgment lien against a prior owner of the property, a grantor under a
special warranty deed would not have to defend the title against that judgment lien since it was not created or suffered by the grantor. Special warranty deeds have historically been used as fulfillment deeds for land sale contracts since the deeds may be delivered many years after the sale closed and possession was transferred. Likewise, grantors who obtained title to property through a foreclosure may choose to convey by special warranty deed since they would know what encumbrances they may have created or suffered, if any, but may not know what else may encumber the property.
Bargain and Sale Deeds
Bargain and sale deeds are similar to warranty deeds, except they do not contain any warranties or covenants. They convey the entire interest in the property that the deed purports to convey as of the date of the deed, they pass after-acquired title, and they estop the grantor and grantor’s heirs, successors, and assigns from asserting they had an estate less than the deed purports to convey as of the date of the deed. As with the other deed forms, a grantor must still expressly exclude any retained property or interests. Bargain and sale deeds are useful in conveying interests in property to family members or related entities; but the parties should confirm with their title company that such a conveyance will not invalidate any existing title policy on the property. Bargain and sale deeds are also used to convey lesser interests in property, such as easements. But, the deed must expressly state that the property interest conveyed is limited to an easement. A standard title insurance policy does not cover the broad covenants of title that are in a warranty deed. Therefore a grantee taking title through a bargain and sale deed who wants the additional protections of a warranty deed should consider an extended coverage title policy.
Quitclaim Deeds
Quitclaim deeds are commonly used to release interests in or claims to property. A statutory quitclaim deed “releases and quitclaims” a grantor’s property interest to grantee, but does not imply that the grantor has any interest at all. Quitclaim deeds do not operate as an estoppel on the grantor. Neither do they convey any title or interest
that the grantor may thereafter obtain (after-acquired title). A quitclaim deed may be used to convey all of the estate that a grantor could convey under a bargain and sale deed, but to be equivalent, the grantor would need to add language including any after-acquired title of the grantor.
A quitclaim deed could be used to resolve a boundary line dispute by releasing all claims one party may have to the other party’s specifically described property. A quitclaim deed could also be used to release easements or other rights to or liens on real property by describing the right or interest being released in the deed. Parties should avoid using quitclaim deeds to transfer or convey title to thirdparty purchasers, as many title insurance companies refuse to insure title acquired through a quitclaim deed. The statutory forms of the four Oregon deed forms are permissive, meaning they may be modified to fit specific situations. However, it is important to obtain situation-specific legal advice to choose the proper form of deed and language to achieve the goals of a transaction.
(1)
Warranty deed form
(2)
Warranty deeds may be in the following form:
_____, Grantor,conveys and warrants to_____, Grantee, the following described real property free of encumbrances exceptas specifically setforth herein: (Describe the property conveyed.)
(If there are to be exceptions to the covenants described in ORS 93.850 (Warranty deed form) (2)(c), here insert such exceptions.)
(Following statement of exceptions, here insert statement required under ORS 93.040 (Mandatory statementsfor sales agreements, earnest money receipts or other instruments for conveyance of feetitle to real property) (1).)
The true consideration for this conveyance is $_____. (Here comply with the requirements of ORS 93.030 (Contracts toconvey, instruments of conveyance and related memoranda to state consideration).)
Dated this _____ day of_____, 2___.
A deed in the form of subsection (1) of this section shall have the following effect:
(a)
It shall convey the entireinterest in the describedproperty at the date of the deed which the deed purports toconvey.
(b)
The grantor, the heirs, successors andassigns of the grantor, shall be forever estopped from asserting that the grantor had, at the date of the deed, an estate or interest in the land less than that estate or interestwhich the deed purported to convey and the deed shall pass any and all after acquired title.
(c)
ORS 93.850
effect
(3)
It shall include the following covenants, each of which shall run in favor ofthe grantee and the successors in title of thegrantee as ifwritten in the deed:
(A)
That at the time of the delivery of the deed the grantor is seized of the estate in the property which the grantor purports to convey and that the grantor has good right to convey the same.
(B)
That at the time of the delivery of the deed the property is freefrom encumbrances except as specifically set forth on the deed.
(C)
That the grantorwarrants and will defend the title to the property againstall persons who may lawfully claimthe same.
If the grantor desires toexclude any encumbrances or other interests from the scope of the covenants of the grantor, such exclusions must beexpressly set forthon the deed. [1973 c.194 §1; 1999 c.214 §1]
(1)
Special warranty deed form
(2)
Specialwarranty deeds may be in the following form:
_____, Grantor,conveys and specially warrants to_____, Grantee, the following described real property free of encumbrancescreatedor suffered by the grantor except as specifically set forth herein: (Describe the property conveyed.)
1. (If there are to be exceptions to the covenants described in ORS 93.855 (Special warranty deed form) (2), here insert such exceptions.)
(Following statement of exceptions, here insert statement required under ORS 93.040 (Mandatory statementsfor sales agreements, earnest money receipts or other instruments for conveyance of feetitle to real property) (1).)
The true consideration for this conveyance is $_____. (Here comply with the requirements of ORS 93.030 (Contracts toconvey, instruments of conveyance and related memoranda to state consideration).)
Dated this _____ day of_____, 2___.
A deed in the form of subsection (1) of this section shall have the same effect as awarranty deed as described in ORS 93.850 (Warranty deed form), except that thecovenant of freedom from encumbrances shallbe limited to those encumbrances created or suffered by the grantor and the covenant of warranty shall be limited to read: “That the grantorwarrants and will defend the title to the property against allpersons who may lawfullyclaim the same by, throughor under the grantor.”
(3)
If the grantor desires toexclude any encumbrances or other interests from the scope of the covenants of the grantor, such exclusions must beexpressly set forthon the deed. [1973 c.194 §2; 1999 c.214 §2]
ORS 93.855
effect
(1)
Bargain and sale deed form
(2)
(a)
Bargain and sale deedsmay be in the following form:
_____, Grantor,conveys to_____, Grantee, the following described real property: (Describe the property conveyed.)
(Following description of property, here insert statement required under ORS 93.040(Mandatory statements for sales agreements, earnest money receipts or other instruments for conveyance of fee title to real property) (1).)
The true consideration for this conveyance is $_____. (Here comply with the requirements of ORS 93.030 (Contracts toconvey, instruments of conveyance and related memoranda to state consideration).)
Dated this _____ day of_____, 2___.
A deed in the form of subsection (1) of this section shall have the following effect:
It shall convey the entireinterest in the describedproperty at the date of the deed which the deed purports toconvey.
(b)
The grantor, the heirs, successors andassigns of the grantor, shall be forever estopped from asserting that the grantor had, at the date of the deed, an estate or interest in the land less than that estate or interestwhich the deed purported to convey and the deed shall pass any and all after acquired title.
(3)
A bargain and saledeedshall not operate to provide any covenants of titlein the grantee and the successors of the grantee. [1973 c.194 §3; 1999 c.214 §3]
ORS 93.860
effect
(1)
ORS 93.865
Quitclaimdeed form
(2)
Quitclaim deeds maybein the following form:
_____, Grantor, releases and quitclaims to_____,Grantee, allright, titleand interest in and to the following described real property: (Describethe property conveyed.)
(Following description of property, here insert statement required under ORS 93.040 (Mandatory statements for sales agreements, earnest money receipts or other instruments for conveyance of fee title to real property) (1).)
The trueconsideration for thisconveyance is $_____. (Here complywith the requirements of ORS 93.030 (Contracts to convey, instruments of conveyance and related memoranda to state consideration).)
Dated this _____ day of_____, 2___.
(3)
A deed in the form of subsection (1) of this section shallhavethe effect of conveying whatever titleor interest, legalor equitable, the grantor mayhave in the described propertyat the date of the deed but shall not transfer any title or interest which the grantor maythereafter obtain nor shall it operate as an estoppel.
A granteetaking titleby way of a quitclaim deed shallnot, merelybecauseof receipt of title by or through such a deed, bedenied the status of a good faith purchaser for value.
[1973 c.194 §4; 1999 c.214 §4]
effect
