Many people who are not real estate professionals are under the impression that there is just one kind of real estate deed. They might even think that a deed and a title are the same thing. (A title refers to the concept of ownership, while a deed is the document that codifies and protects a party’s ownership of a property.)
In fact, there are multiple types of deeds. Some are specific to Arizona. Understanding the type of deed that corresponds to a property can affect everyone who is involved in a real estate transaction.
Types of primary deeds
A general warranty deed is the most common primary deed. It guarantees a buyer that there are no liens on a property and that a seller has the right to transfer ownership. Further, it guarantees that if a lien or other issue is discovered later, even one associated with a previous owner, the seller is responsible for resolving it.
A special warranty deed guarantees no current liens. However, it does not protect a buyer if a problem with the title that predates the seller is discovered.
Quitclaim deeds and “bargain and sale” deeds are rarer and used only in specific circumstances, like transfers of property between relatives or in divorce. They provide little or no protection against title issues for the person who buys or receives the property.
These are typically for transfers of property that are ordered by a court or are part of the administration of an estate. For example, an executor’s or an administrator’s deed is used when property is transferred into the name of the beneficiary or next-of-kin after the owner dies. Which one is used depends on whether or not there was a will at the time of the decedent’s death.
In Arizona, a beneficiary deed is also associated with inheritance. It lets someone transfer property to an heir without it having to go through probate. This can be an important part of estate planning for those seeking to avoid or minimize probate for their loved ones.
Since Arizona is a community property state, any property purchased during the marriage is typically considered to belong to both spouses, even if only one spouse purchased it. If you do not want your spouse to stake a claim to a property should you divorce, they generally must agree to sign a disclaimer deed.
Since these deeds (and others) are associated with very different rights and protections for the buyer, it is crucial to know what kind of deed comes with a property and to understand it. Seeking legal guidance can help you protect your rights and avoid costly mistakes when you are involved in a real estate transaction accordingly.