Deeds

1. What is a Deed?

A deed is a formal, written document that legally transfers ownership of real property from one party to another. It serves as proof of the transfer of property rights and contains the terms of the transaction. The primary purpose of a deed is to provide a public record of property ownership, which is vital for resolving any future disputes about the title and ownership of the property.

In Michigan, as in most states, a deed must meet specific legal requirements to be valid. These include being in writing, signed by the grantor, and containing a legal description of the property.

2. Types of Deeds in Michigan

Michigan recognizes several types of deeds, each with specific purposes and implications for the grantor and grantee. The most common types of deeds used in Michigan real estate transactions include:

a. Warranty Deed

The warranty deed is the most common type of deed used in Michigan for the transfer of real property. It provides the highest level of protection to the grantee, as it guarantees that the grantor has clear title to the property and the legal right to transfer ownership. The grantor also guarantees that the property is free from any encumbrances (such as unpaid liens or claims) and that they will defend the title against any claims that arise after the transfer.

Key features of a warranty deed include:

• Covenant of Seisin: This is a guarantee that the grantor owns the property and has the right to transfer it.
• Covenant Against Encumbrances: The grantor guarantees that the property is free of any encumbrances, except those explicitly stated in the deed.
• Covenant of Quiet Enjoyment: The grantee has the right to use and enjoy the property without interference from others claiming title to the property.
• Covenant of Warranty: The grantor promises to defend the title against any future claims.

b. Quitclaim Deed

A quitclaim deed is a type of deed where the grantor transfers whatever interest they have in the property to the grantee, without making any warranties or guarantees about the title. This means that if the grantor has no ownership interest in the property, the grantee will receive nothing. Quitclaim deeds are commonly used in situations where the parties know each other well, such as transferring property between family members, divorcing spouses, or removing a name from the title.

Key features of a quitclaim deed include:

• No Warranties or Guarantees: The grantor makes no promises about the property’s title, and the grantee receives only the interest that the grantor may have in the property.
• Common Uses: Quitclaim deeds are often used for estate planning, property transfers between spouses or family members, or clearing up title issues.

c. Special Warranty Deed

The special warranty deed is a hybrid of the warranty and quitclaim deeds. In a special warranty deed, the grantor guarantees the title only against claims or encumbrances that arose during the time the grantor owned the property. This is a more limited guarantee than a full warranty deed, but it is more protective than a quitclaim deed. Special warranty deeds are often used in commercial real estate transactions or when a title company is involved.

Key features of a special warranty deed include:

• Limited Warranty: The grantor only warrants that they have not caused any issues with the property’s title during their ownership, but they are not responsible for any claims or issues that predate their ownership.
• Common Uses: Special warranty deeds are typically used in sales of property by businesses, financial institutions, or foreclosures.

d. Bargain and Sale Deed

A bargain and sale deed is a deed that implies the grantor owns the property but makes no guarantees or warranties about the title. This type of deed conveys ownership, but the grantee is taking the property "as is," meaning they accept the property with any defects in the title. The grantor does not make any promise regarding encumbrances or issues with the title. This type of deed is less common in Michigan but may be used in certain circumstances, such as in foreclosure sales or transfers by court order.

e. Deed of Trust (Less Common in Michigan)

A deed of trust is commonly used in some states (although not as frequently in Michigan) to secure a loan. It involves a three-party agreement between the borrower (trustor), lender (beneficiary), and a trustee. The trustee holds the title to the property as security for the loan and can sell the property if the borrower defaults on the loan. In Michigan, this is generally replaced by mortgage deeds rather than deeds of trust.

3. Requirements for a Valid Deed in Michigan

To be legally valid, a deed must meet several requirements under Michigan law. These include:

• Written Form: The deed must be in writing. Verbal agreements or promises to transfer property are not sufficient.
• Grantor and Grantee Information: The deed must include the names of the grantor (seller) and grantee (buyer).
• Legal Description of the Property: The deed must contain a legal description of the property being transferred. A simple street address is not sufficient. The legal description often includes details such as the lot number, block number, subdivision, and sometimes reference to a previous deed or survey.
• Grantor’s Signature: The deed must be signed by the grantor (the person transferring the property).
• Witness or Notary Public: While Michigan law does not require a deed to be witnessed, the deed must be notarized by a notary public to be valid for recording purposes.
• Delivery and Acceptance: The deed must be delivered to the grantee and accepted by them. The transfer is not complete until the grantee accepts the deed, which usually occurs when they record it with the county clerk.

4. Recording a Deed in Michigan

Once the deed is executed, it must be recorded with the local county register of deeds office. Recording the deed provides notice to the public of the transfer of property ownership and protects the grantee's interest in the property. Recording is especially important for establishing the priority of ownership, ensuring that the grantee’s rights are legally recognized.

a. Where to Record

In Michigan, deeds are recorded in the County Register of Deeds Office in the county where the property is located. Each county has its own register of deeds office where real estate documents are filed.

b. Requirements for Recording

To properly record a deed in Michigan, the following must be submitted:

• Completed Deed: The original deed with all required signatures, notarization, and legal description of the property.
• Recording Fee: A fee must be paid to the county to record the deed. Fees vary by county and are typically based on the number of pages in the document.
• Affidavit of Value: Michigan law requires that an affidavit of value be submitted with the deed, providing the purchase price or the fair market value of the property being transferred. This is used to assess property taxes.
• Property Tax Identification Number (Parcel Number): The deed must include the property’s tax identification number or parcel number, which helps identify the property for tax purposes.
• Tax Certification: In some counties, tax certification may be required, confirming that property taxes have been paid.

c. Importance of Recording

Recording a deed in Michigan is crucial for establishing the official ownership of a property. It serves as public notice that the property has changed hands, ensuring that any third parties, such as potential buyers or creditors, are aware of the transaction. It also protects the grantee's rights by establishing a public record, which helps avoid disputes over ownership.

5. Conclusion

Deeds in Michigan are fundamental documents in property transactions, serving as the legal instrument through which real property is transferred from one person to another. Understanding the types of deeds, the requirements for valid deeds, and the process of recording deeds is crucial for anyone involved in real estate in Michigan. Whether using a warranty deed for a traditional sale or a quitclaim deed for transferring property between family members, it's important to follow the legal requirements for proper execution and recording. By doing so, property owners can protect their legal rights and ensure that their interests are recognized and upheld in the eyes of the law.

Works Cited

1. Michigan Legislature. "Michigan Compiled Laws - Property Law." Michigan Legislature, 2024, https://www.legislature.mi.gov.
2. Michigan Department of Treasury. “Recording Property Deeds and Legal Requirements.” Michigan Department of Treasury, 2024, https://www.michigan.gov/treasury.
3. Michigan State Bar Association. "Understanding Property Deeds in Michigan." Michigan State Bar Association, 2024, https://www.michbar.org.
4. Michigan State University Extension. “How to Transfer Property Ownership Using a Deed.” Michigan State University Extension, 2024, https://www.canr.msu.edu.
5. County Register of Deeds. "How to Record a Deed in Michigan." County Register of Deeds, 2024, https://www.michigan.gov.
6. American Land Title Association. "The Different Types of Property Deeds." American Land Title Association, 2024, https://www.alta.org.
7. U.S. Legal, Inc. "Quitclaim Deeds in Michigan." US Legal Forms, 2024, https://www.uslegalforms.com.