By Laura J. Henneberry SCRP, SGMS and Joan M. Brady, CRP, GMS, Attorney
In the course of any home sale relocation process, a transferring employee is asked to sign a deed. What types of deeds exist? Who has to sign the deed? What if the property is in a trust?
With the help of Joan Brady, Partner, Morreale & Brady, P.C., Laura Henneberry SCRP, SGMS of Morreale Real Estate Services has received answers to some of the more common questions surrounding deeds.
Q. Joan, what type of deed is the employee usually asked to sign? And, is there any specific reason why this type of deed is used?
A. The most commonly used deed form is a Warranty Deed. By signing this deed, all titleholders of record warrant that they are providing good title to the purchaser, subject only to those items of record that stay with the title, i.e. building lines, easements, and real estate taxes, which are paid current, but remain a matter of record.
Q. Does the spouse always sign the deed? If not, under what circumstances does the spouse not sign the deed? And, on the flip side of that, if the spouse doesn’t show in title, why does the spouse have to sign the deed?
A. If the spouse is a titleholder of record, the spouse must sign the deed. If the spouse is not a titleholder, but the property is located in a state that has spousal homestead laws (spouse has an interest by reason of marriage to titleholder) the spouse must sign the deed to waive any homestead rights in order to provide good title.
In states that do not have marital homestead rights, or when it can be established that the spouse maintains a separate legal residence, the spouse may not have to sign the deed.
In states that recognize civil unions, a partner to a civil union will also be required to sign a deed, even though he/she may not be a titleholder of record. Again, this is to waive any interest the partner may have in the property at the time of sale.
Q. What is a Quit Claim Deed? And, when is it most often used?
A. A Quit Claim Deed does just what the name implies. It is a deed that conveys any interest that may be held by the signer. It does not warrant or guarantee any ownership, but alternatively conveys whatever interest a party may have in the property.
We often use a Quit Claim Deed when a married couple becomes divorced and one spouse is conveying their interest to the other. In this event the property is typically still subject to the existing mortgage(s) of record.
Specifically in relocation, we may use a Quit Claim Deed to add a transferee to a title when they are not a titleholder of record, but they are the transferring employee.
Q. What is a Trustee’s Deed? How do you get one?
A. When title to property is held in a trust, at least one individual is named in the trust as trustee. The trust agreement designates who has the authority to sign a deed in the event the property is sold. A trustee does not own the property individually, but is the authorized signer on behalf of the trust.
Depending on the type of trust in use, a trustee’s deed is typically prepared by an attorney, a land trust company or a title insurance company.
Q. Does the deed that an employee signs differ from the deed that a corporation may use to transfer title (in a two deed process for example)?
A. The deed signed by a transferring employee that transfers interest to the corporation in most cases is substantially the same as the deed being provided by the corporation to the outside buyer.
Both deeds are provided to convey good title to a buyer, whether it be the corporation purchasing from the employee or the outside buyer purchasing from the corporation.
Q. Why do some deeds have $1 for consideration and others show the value of the property as determined either by a sales price or a guaranteed buyout amount?
A. Every deed must show some amount of consideration for the transfer of the title to the property, but most state laws do not require the actual amount to be shown. The most commonly used amounts indicate “$1 or $10 and other good and valuable consideration.” This is meant to demonstrate that this is not a gift, but a transfer in exchange for some form of consideration.
So, if any of you would like a Quit Claim deed to say, Wrigley Field or the Willis Tower, feel free to give me a call! I’ve got you covered!
As always, should you have a specific question regarding a specific property, please seek legal counsel.
Nothing in the above should be construed as legal advice.
For more information regarding Morreale Real Estate Services, Inc. (www.morrealeres.com) contact Lynn Menzie at 630.545.5369 (firstname.lastname@example.org).
For more information regarding Morreale & Brady, P.C (www.morrealelaw.com) contact Joan Brady at 630.790.6315 (email@example.com).