Serena Brown

Types of Ownership Deeds

It is important to understand the type of ownership deed you will receive and the warranty that the title company is giving you on the title search that you receive.

There are different types of ownership deeds you may receive as a real estate investor.  The types of ownership deeds are general warranty deed, sheriff's deed, quit claim deed, special warranty deed, tax deed, trustee deed, and certificate of title.

It is important to understand that no matter which ownership deed you receive it is best to have title insurance on it.

Title insurance is a policy that guarantees that the title for the property is clear of liens and/or judgments.  It also guarantees that the owner of the property has the right to sell the property.

The title insurance protects the owner and the new owner from losses that may arise from unknown or undisclosed defects in the pas chain of title.  Unlike most insurance, title insurance is paid in a one time installment at the closing.  This one time fee protects your interest as the new owner and your heirs’ interest for as long as you own the property.

The title policy is insured by the title company.  The title company will provide legal defense against any and all challenges to the title and reimburse the owner against any losses as a result of hidden or unknown defects in the owner's rights.

Now, that we understand what the title insurance is.  Let's examine the different types of ownership deeds.

As an investor, you may come to own your property through a special warranty deed.

Written by Serena Brown

http://www.taylorbrownrealestatetalks.com

Let examine what happens to get you the special warranty deed.  First, there is a sheriff's deed issued by a judge.  This is issued by a judge to satisfy a judgment or lien.  This takes place in a foreclosure.

Before we get to the sheriff's deed or special warranty deed, the mortgage company receives a certificate of title after the foreclosure.    This is how the property is conveyed to the mortgage company.  After the mortgage company acquires the sheriff’s deed, they must convey a warranty of ownership to the new owner.  The mortgage company does this through a special warranty deed.  Be aware, that a special warranty deed only warrants back to the mortgage company's ownership not any further.  Remember, until the last payment the mortgage company really owns the property.  You, as the owner, have insurable interest.  Insurable interest is your right or benefit that you have in the property.  Meaning as long as the mortgage payment is current your interest is still there.  Once you are late or not able to pay your interest is superceded by the mortgage company.  However, you can still protect your interest in the property if your situation or ability to pay has now changed

Other forms of deeds include a tax deed.  A tax deed is given if the homeowner has not paid their property taxes and someone else pays those taxes for the homeowner. This person receives this document when paying taxes on the behalf of the homeowner at a tax sale.

Still yet, there is another type of deed.  It is a trustee deed.  A trustee deed is used to convey a property out of a trust.

The next type of deed is a quit claim deed.  A quit claim deed is used to release whatever interest the owner has in the property to someone else.

The deed that offers the most protection is the general warranty deed or warranty deed.  This deed warrants against all defects in chain of ownership before or after ownership of the property.

Article Tags: Ownership Deeds, Warranty Deed,, Quit Claim, Special Warranty, Title Insurance, Warranty Deed , Mortgage Company

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR