You can use a deed to transfer ownership or take out a loan on your home as a homeowner. There are various other sorts of deeds that you can employ, but grant deeds and deeds of trust are two of the most prevalent. This article will define the difference between a grant deed vs. a deed of trust in California. Working with a financial advisor for experienced advice on real estate problems is good.
Grant Deed vs. Deed of Trust
So, how can you distinguish between a grant deed vs. a deed of trust? A grant deed is a legal document used to transfer real estate ownership from the grantor to the grantee. It is presented by a seller to a real estate buyer as proof that the property in question is not held by anybody else, is free of hidden obligations, and is in the condition agreed upon. On the other hand, a deed of trust is a legal document that is used in certain states to secure real estate used as collateral for a loan. It legally transfers title to real property to a trustee (lender) until the borrower (trustor) fully repays the loan.
A grant deed is signed by the grantor to make the transfer lawful, whereas a trust deed is signed by the trustor and a lender (beneficiary) (borrower). The trustor transfers the monies to the seller, who then executes a grant deed, transferring the property to the borrower.
Grant Deed vs. a Deed of Trust: Definition
What Is a Grant Deed?
A grant deed is a legal document that transfers ownership of real property between two parties for a set amount of money. The full legal description of the property, the names of the people to whom the property is being transferred (grantee) and from whom the property is being transferred (grantor), and the sales price are all included.
The grantor’s legal ownership of the land is guaranteed by grant deeds. According to the gift deed, there have been no title issues while the grantor has owned the property. It does not, however, ensure that the property is free of title defects that existed before the grantor acquired the title.
What Is a Deed of Trust?
A deed of trust is a legal document that guarantees the repayment of a loan secured by real estate. The deed of trust guarantees that the property will be used as security for the loan if the borrower defaults on their payments. If the borrower fails to make payments, the lender may be forced to foreclose on the property. The deed of trust assures that the lender receives the proceeds of the loan-securing property’s sale or auction.
When a borrower fails to pay, the lender can use a deed of trust to foreclose on the property and sell it without going through the courts. A deed of trust is faster and less expensive than foreclosing on a mortgage deed because it does not require a court hearing.
Without the borrower’s permission, deeds of trust can be assigned. Many lenders sell their loans and hand over the deed of trust to the new servicer or owner. The borrower is advised of the transfer so that they know to whom they should submit future payments.
Grant Deed vs. Deed of Trust: Differences
The presence of a loan and future responsibilities is the main distinction between a grant deed and a deed of trust. The grantor is usually no longer connected with the real estate after the grant deed has been executed.
A deed of trust, on the other hand, establishes a continuing relationship between the borrower and the lender until the loan is paid off or the property is transferred to another party. When a property is transferred, the lender transfers their rights to the new lender through an “assignment of the trust deed.”
If a borrower fails to pay, the lender has the authority to foreclose on the property to recover the loan. The donor of a grant deed does not maintain these types of property rights. They forfeit all rights once the deal is completed.
Grant Deed vs. Deed of Trust in California
Grant deeds and quitclaim deeds are the two most prevalent types of deeds. Both forms of deed properly transfer title, but there are some important variances between them.
What are a Grant Deeds in California Los Angeles
Giving deeds “grants” the grantee an interest in real property. One of the keywords in the deed that distinguishes a grant deed from a quitclaim deed is the term “grant.” The following two implied warranties are included in all grant deeds:
- The grantor did not transfer the identical property to a different grantee.
- The property is free of encumbrances that the grantor did, made, or endured.
Taxes, assessments, and liens are examples of such encumbrances; but they do not include any physical encumbrances that the grantee can see on the property.
Quitclaim Deeds in California
A quitclaim deed gives the grantor’s entire right, title, and interest in the real estate at the time of transfer. A quitclaim, unlike a grant deed, does not include the two implied covenants mentioned above. A grantee in a quitclaim deed, on the other hand, receives title to the property subject to all title defects; equities against the grantor that existed at the time of the transfer. The grantee has no right to sue the grantor for encumbrances on the property or title flaws.
Real estate attorneys in Los Angeles, California, have extensive knowledge of all sorts of deeds and can help you with any problem originating from grant deeds and quitclaim deeds, as well as commercial and residential real estate transactions. Give us a call to check if you qualify for a free consultation.
The Basics of Foreclosure on a Deed of Trust in California
While many California residents have executed Deeds of Trust on their houses or real estate assets; few are completely aware of what they are. They have a vague resemblance to mortgages and secured loans for the purchase of real estate. There is a nagging fear that if one does not pay, the lender will be able to confiscate the property through the Deed of Trust. When pressed, however, most people are unaware of a document that is likely the single most powerful document in terms of enforcing rights against them that the law permits.
This essay will go through the fundamentals of a Deed of Trust and the foreclosure process in California. Other states have their own set of rules. Before continuing, the reader should study the two articles on Real Estate Transactions and Debt Collection.
When someone borrows money, the lender may want collateral to ensure that the loan is repaid. The security can be an assignment of a car’s pink slip, a pledge of the debtor’s various assets secured by filing a UCC-1, or a pledge of real estate. When real estate is used to secure a loan, it is normally done through the use of a mortgage or, in California, a Deed of Trust.
Grant Deed vs. a Deed of Trust: Legal Requirements
Before a grant deed vs. a deed of trust may be declared lawful, they must both meet some specific legal conditions. Both the grantor and the grantee involved in the transaction must sign these deeds. The deed must also be filed with the local county recorder’s office to become a public record. Many people hire a real estate lawyer to help them draft this contract so that it will stand up in court.
Conclusion
For the transfer of real property, many distinct types of deeds can be utilized. You’ll employ one type over the other depending on the circumstances of your transaction. A grant deed is a transaction in which two people or corporations exchange property without securing it as collateral. Mortgage firms employ a deed of trust when a homeowner takes out a loan against their home. If a borrower defaults on their payments, this paperwork allows the lender to foreclose on the property faster and for less money.
Grant Deed vs. Deed of Trust FAQs
What is the difference between a Grant Deed and a Warranty Deed?
Grant Deeds provide a little less buyer protection than Warranty Deeds. Some states do not recognize grant deeds and instead rely on warranty deeds. Both are used to demonstrate that the property is free of liens and other financial liabilities. They further declare that no other buyer will be able to purchase the property from them. The promises in a grant deed are inferred, whereas they are “guaranteed” in a warranty deed.
What is the difference between a Grant Deed and a Quitclaim Deed?
Grant Deeds are most commonly utilized as a part of the paperwork involved in the transfer of property by parties who do not know each other. Quitclaim Deeds are frequently used to transfer ownership of the real estate and are frequently utilized in divorce processes.
How do I get a copy of a Grant Deed?
Grant Deeds become public records after they are filed. The local recorder’s office in the county where the property is located should be able to provide you with a copy. The process for requesting a copy varies by county. Some counties offer online services, while others may require a visit to the county recorder’s office.
What is the difference between a Grant Deed and Title?
A title is a document that proves who owns something. The owner’s details, such as their name and signature, will be included in the title. A Grant Deed, on the other hand, is a legal document that transfers property from one person to another.
