Requirements for a Valid Deed

There are several requirements that must be met to make a deed completely valid. The most basic and overarching of these requirements is that the deed must meet all of the legal requirements of the state in which the subject property is located.
If the deed is being used to convey title to property in Alaska, the deed must meet all of Alaska’s legal requirements—even if the transaction is being closed in an office in Miami. Although each state varies, all states have most of the following requirements:
1. Written. The statute of frauds of most states typically requires written deeds, making oral deeds unacceptable.
2. Identified parties. The full names of both the grantor and grantee must be included, often with their current official address. The name indicated as grantor should be the same name currently recorded as titleholder to the property. However, if the indicated name is different from the grantor’s true name, the deed is still valid. Thus, misspellings and different names will not invalidate a deed-in fact, the grantor’s name often does not have to appear in the deed-as long as the grantor adequately signs it. A common way to confirm this fact is with the use of the term “the undersigned” at the start of the deed.
3. Grantor capacity. The grantor must be of legal age and legal competence to convey the title. Most states will void a deed if the court has declared the grantor to be insane or mentally incompetent to understand in a reasonable matter the nature and consequences of the transaction, especially at the
time the deed is signed.
4. Consideration. The deed should clearly describe the consideration, such as the purchase price, being given to the grantor for conveying the property. But this has become a formality with most deed forms, so the actual presence of consideration is unnecessary. Consideration may not be even necessary,
especially if the grantor is “giving” the property to the grantee. Note, however, that creditors may invalidate such gift transfers as fraudulent attempts to circumvent the creditors’ rights.
5. Granting clause. Also called words of conveyance, the deed must clearly state the grantor’s intention to convey the title to the grantee. Warranty deeds typically use the phrase “convey and warrant” or “grant, bargain, and sell.” Quitclaim deeds typically use the phrase “convey and quitclaim” or “remise, release, and forever quitclaim.”
6. Habendum clause. The deed’s habendum clause describes the estate being conveyed. This clause will indicate whether the title being conveyed is fee simple, life estate or leasehold. This clause should be read carefully. For example, whenever a time limit or condition is indicated, the fee simple could be
turned into a leasehold or life estate. Also, if the habendum clause indicates some sort of usage, the conveyances may just be of an easement, rather than fee simple or leasehold. For more information about types of estates, please see the “Title and Estates in Land” article.
7. Legal description. A complete and precise legal description of the subject property must be included in the deed. For more information, see the “Survey and Legal Description” article.
8. Grantor signature. The grantor must sign the completed deed. Note, however, that the grantee’s signature is not required. If the signed name does not match the name indicated in the body of the deed or the grantor’s true legal name, the deed may still be considered valid. [For example, Jonathan Xavier
Jones signs his name John X. Jns, the deed may still be considered valid.] Persons unable to write may affix their mark with an X or sometimes a thumbprint, but a witness is usually required for such signatures.
9. Delivery. The deed must be legally delivered by the grantor during the lifetime of the grantor; and some states require that it be accepted by the grantee to complete the transaction. If the grantor fails to deliver the deed while he or she is still alive, the deed (even if signed) will not be valid if the grantor has died before delivering the deed. However, the grantee does not have to receive the deed in order for delivery to occur. Delivery occurs whenever the grantor has executed the deed and signifies his or her intention to finalize the deed. Although words and action are normal, deeds can be delivered without one or the other. Note that silence by the grantee or the official recording of the deed is typically considered acceptance by the grantee.
10. Recording. To make the conveyance official, the deed must be publicly recorded, usually with the local county records office. This recording also prevents title challenges from third parties. Optionally, the deed may also contain the following items:
l Warranties of title. Indicate any covenants or guarantees that the grantor provides with the deed.
l Recitals. Indicate mortgage liens and other encumbrances against the property.
l Exceptions and reservations. The grantor may set aside certain portions of the property or the estate being conveyed. These exceptions and reservations must be clearly spelled out in the deed.
l Official date. This is customary, but lack of it will not necessarily invalidate the deed.
l Seal. Most states no longer require seals, but a few still do. However, most states require official corporate seals on deeds executed by a corporation.
l Witnesses. Many states require witness signatures, often two separate persons, to make the deed official. They are definitely required when the deed is signed and executed with a mark.
l Documentary stamps. Often called transfer stamps, these are forms of taxes charged by states, counties and municipalities to convey property or to record certain legal documents. For example, a 1999 home purchase in Chicago will incur a $1 per $1,000 (of the sales price) transfer stamp charge
from the state of Illinois, as well 50¢ per $1,000 charge from Cook County and a shocking $7.50 per $1,000 from the city of Chicago.
It should go without saying that a deed obtained by fraud, forgery, misrepresentation, or coercion can and will be voided and set aside by the courts. The courts may also set aside mutual mistakes, when both the grantor and grantee have serious, mistaken assumptions about the transactions.