What is a grant act?
What is a grant act?
A deed documents the ownership of a property and identifies the seller and buyer when selling, buying or transferring a home. The seller is known as the grantor and the buyer is known as the beneficiary.
A deed of concession, also known as an act of negotiation and sale or an act of limited warranty, is a type of deed, most often used in:
- Foreclosure sale
- Sales tax
- Judiciary process
- Cash purchase
- Divorce in which a deed of transfer between spouses is used to transfer property from one spouse to another
Unlike other types of deeds, a grant deed does not protect the buyer from debts or liens. It indicates that the buyer or concessionaire holds title and retains possession of the property, but makes no express warranty against the charges.
“A principal who signs a grant deed guarantees that he has done nothing that will prevent the assignee from having a good title,” says Elizabeth Whitman, a real estate lawyer in Potomac, Maryland.
However, this “is not a full guarantee of title because it does not guarantee that someone other than the person signing the deed has done nothing to affect the title,” says Whitman, who adds that deeds of concession are only used in certain states. Other states use special guarantee deeds, which are similar.
Elements of a grant act
A viable concession deed includes several provisions (depending on national or local laws):
- The names of the assignor and the assignee
- A legal description of the transferred property (address, lot / parcel number, boundaries, parcel, etc.)
- Language indicating the transfer / grant of ownership
- Two guarantees: the grantor has not sold or assigned the property to anyone else; and the property is unencumbered (except those which the seller has disclosed to the buyer)
- Exceptions to the guarantee of title (for example, a public service easement or a public right of way)
- Signature of principal
The deed of concession may also include the addresses of the grantor and the concessionaire and the date of the deed, which “may involve the presence of a witness and a notary who seals or stamps the document of the deed.” , adds Court Maynard, a real estate agent with First Team Real Estate in Carlsbad, California.
Deed of concession vs deed of guarantee
Deeds of concession are different from other types of deeds, including deeds of guarantee.
With a deed of collateral – often used when buying a home from a builder or with the help of a real estate agent – the grantor guarantees that he has a defensible ownership interest in the property that can be transferred to the beneficiary. .
“A general warranty deed ensures that the new owner will have good title free from any encumbrance, debt or lien, and that the seller or grantor also agrees to defend the title against any third party claims,” explains Whitman. “A deed of concession, on the other hand, does not include any agreement to defend the title against claims.”
A special guarantee deed is similar to a general guarantee deed, except that the grantor guarantees a title free of liens, debts or charges only during the period that the grantor was the owner of the property – the deed does not guarantee that the title deeds did not exist before the grantor took possession. A special deed of guarantee is often used for the transfer of a trust or an estate.
Other types of acts
Deeds of concession also differ from deeds of waiver, also referred to as “as is” deeds, in that deeds of waiver are not exhaustive. Deeds of renunciation are commonly used when property is transferred in divorce or as a gift.
“A waiver deed offers the least protection, with the grantor guaranteeing no claim of title,” says Sarah Stitgen, an attorney at Atlanta-based Cook & James. “It simply indicates that the grantor transfers all the interests he owns to the beneficiary.”
There are also special acts that can be used in certain circumstances, such as in court proceedings. These acts, however, do not offer any solid protection to the buyer or the licensee. These special acts include:
- Tax act, used when the ownership of a property is transferred to the government due to unpaid taxes
- Deed in lieu of foreclosure, used when the ownership of a property is transferred to the bank or lender in order to avoid foreclosure
- Deed of the executor, used when the owner of a property dies and the executor transfers the property to an assignee named in the will
- Act of donation, used when the good is offered to the assignee by the assignor without any sum of money involved
At the end of the line
Although deeds of concession have a purpose, there is no guarantee attached to it, so be careful when you are involved in a real estate transaction that includes one. It is best to use a real estate lawyer and a securities firm when it comes to this type of act.
“For example, there might be a tax lien or a mechanic’s lien that you, as the new owner, will have to pay to secure clear title to the property,” says Whitman. “The only way to be sure you’re protected from clouded title issues like this is to have a real estate lawyer review your title deeds before you make a purchase. “
To protect yourself against these types of issues, also consider purchasing a homeowner’s title insurance policy, recommends Whitman. This is different from the lender’s policy that a mortgage lender requires you to buy and covers you as a homeowner.