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Previous Issues
Issue 30: Loan Sale Premiums Hold Steady in November

Issue 29: Proper Risk Management Protection and Credit Worthiness

Issue 28: BoeFly Helps Veterans With Disabilities Connect With Lenders to Obtain Small Business Loans

Issue 27: Loan Sale Premiums Level off in October

Issue 26: SBA Secondary Market changes - Warranty Period and Premiums on New Larger Loans

Issue 25: BoeFly Surpasses the $1 Billion Transaction Mark

Issue 24: Loan Sale Premiums Continue Climb in September

Issue 23: Robert Tannenhauser, CEO of BoeFly, Interviewed by Michael McKee on Bloomberg Radio

Issue 22: Lender Optimism is up While Anxiously Awaiting the Small Business Jobs Bill

Issue 21: Loan Sale Premiums Blast to Record Highs in August

Issue 20: Title Insurance- the Lender's Perspective

Issue 19: Condemnation and Mortgage Lender's Rights

Issue 18: Long-Term Deals Continue Record Climb; Short-Term Deals Fade

Issue 17: Congressman Walt Minnick (D-Idaho) Gets It

Issue 16: Deeds and Forms of Ownership

Issue 15: SBA Loan Sale Premiums Hit Record High in June

Issue 14: What You Need to Know About Property Insurance

Issue 13: SBA Fixed Interest Rate Loans are an Important Product to have at the Ready

Issue 12: 504 Guaranteed Pool Program Summary and Survey Results

Issue 11: Loan Sale Premiums Surge to Record Highs in May

Issue 10: Environmental Risk for Lending Opportunities

Issue 9: How To Take Advantage of the First Lien Position 504 Loan Pool Guarantee Program

Issue 8: Investors Remain for SBA Loans

Issue 7: Retirement Funds for an Equity Injection - Selecting the Right Plan Provider

Issue 6: Why Outsourcing Environmental Risk Management makes Cents for Lenders

Issue 5: Loan Monitoring: Comfort in a Crisis

Issue 4: BoeFly Case Study: The economics of selling SBA guaranteed loans

Issue 3: BoeFly Lender Survey Results Q1 2010

Issue 2: Loan Sale Premiums Rally in Q1

Issue 1: The Importance of Efficiency in Secondary Markets

Deeds and Forms of Ownership

By BoeFly Member: Loren Kroll, Loren H. Kroll, LLC


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A deed is typically an unobtrusive document that has a significant legal consequence to the parties involved. A deed instrument transfers an ownership interest in real estate from one party to another and must indicate who is selling the property, and to whom it is being sold, and in order to be operative, the deed must describe the property with such certainty and definiteness as to be capable of identification. The deed is signed by the party transferring the property and may make that party responsible to the buyer for other claims or conditions on the property.


In order to be valid, a deed must comply with the statutory requirements of the laws of the state in which the property is located. In New York, short forms of particular deeds are set forth in Real Property Law § 258. The use of those forms are merely permissive and there is no provision that property transfers must be in the form set forth in the statute. Furthermore a deed must be executed according to the state's particular requirements. In New York, General Obligations Law §5-703 is controlling.


The many varieties of deeds are


Full Covenant and Warranty Deed


A Full Covenant and Warranty Deed transfers ownership to the property and explicitly promises the buyer that the seller has good title to the property, meaning it is free of liens or claims of ownership. This type of deed includes other representations which are known as current and future covenants such as the covenant against acts or omissions of the Seller or of the Seller's predecessors in title. If any of the covenants are breached, the seller agrees to compensate the buyer for damages. A warranty deed offers the greatest protection for buyers and is a common form of conveyance.


Special Warranty Deed


A special warranty deed contains covenants of title which are limited to the seller's acts or omissions (not the seller's predecessors in title) which may affect title and claims that arose during the time the seller owned the property.


Quitclaim Deed


A quitclaim deed transfers whatever ownership interest the seller may have in the property. When accepting a quitclaim deed the buyer accepts the risk that the seller may not have a valid ownership interest and/or that there may be additional ownership interests in the property.

The most common use for a quitclaim deed is a divorce in which one party grants the other full rights to the property, Quitclaim deeds are also frequently used when there is a "cloud" on title -- that is, when a search reveals that a previous owner or some other party, like the heir of a previous owner, may have some claim to the property. The party can sign a quitclaim deed to transfer any remaining interest he or she may have.


Bargain and Sale Deed


A bargain and sale deed, implies that the grantor has the right to convey title but makes no warranties against encumbrances. This type of deed is used frequently in tax sales and for foreclosure actions.


Recording The Deed


Although not required to be by statute, a deed should be recorded in the County Clerk's office of the county in which the property is located. The reason to record is to give notice to the world that the seller no longer owns the property and that the new owner is the buyer.


Conclusion


When buying or selling real estate, the selection of the deed defines what the seller is giving and what the buyer is receiving. Each variety of deed includes different rights, representations and legal consequences. You should always consult with a real estate attorney to ascertain which deed is suitable for your particular purpose.