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Real Estate Salesperson Exam (National Portion): Deeds, Title Transfer, and Recording Concepts

Importance ★★★★☆ · 45% (estimate)

Overview

This chapter follows title from one owner to the next: what makes a deed valid, which deed protects the buyer most, and how public records and title insurance protect owners.

A valid deed is in writing, names a competent grantor and an identifiable grantee, contains a legal description, words of conveyance, and consideration, and is signed by the grantor. Title passes when the deed is delivered and accepted. A general warranty deed gives the most protection, a special warranty deed covers only the seller's time of ownership, and a quitclaim deed gives no warranties and is often used to clear a cloud on title.

Recording gives constructive notice to everyone, while actual notice is what a person really knows. The chain of title is the history of ownership, and an abstract summarizes the records. Title insurance pays for covered losses such as forgery; the owner's policy protects the buyer and the lender's policy protects the lender. Title can also pass involuntarily, for example by adverse possession, and real property given by will is a devise.

Key concepts

  • General warranty deed

    A deed in which the grantor warrants title against defects from any time in the past.

    Memory tipMost protection for the buyer

  • Quitclaim deed

    A deed that transfers whatever interest the grantor has, with no warranties.

    Memory tipClears a cloud on title

  • Delivery and acceptance

    Title passes when the grantor delivers the deed with intent to transfer and the grantee accepts it.

    Memory tipSigning or recording alone does not pass title.

  • Constructive notice

    Notice the law gives everyone through the public records, whether or not they looked.

    Memory tipRecording = constructive notice

  • Title insurance

    Insurance that pays for covered losses from title defects, including hidden risks such as forgery.

    Memory tipOwner's policy protects the buyer.

  • Adverse possession

    Gaining title by open, notorious, hostile, exclusive, and continuous use for the period set by state law.

    Memory tipInvoluntary alienation

Often tested

  • Recording is not needed for a deed to be valid between the parties.
  • Devise = real property by will; bequest = personal property by will.
  • A quiet title action removes a cloud on title by court order.

3 sample questions

Verified practice questions from this unit.

Practice questionReviewedForms of Ownership, Transfer, and Recording of Title › Deeds, Title Transfer, and Recording★★★★☆

Question 1. Which deed gives the buyer the greatest protection?

  1. ① Special warranty deed
  2. ② Bargain and sale deed
  3. ③ General warranty deed
  4. ④ Quitclaim deed
▼ Show answer and explanation▲ Hide answer and explanation

Answer: ③ General warranty deed

Key point: Most protection = general warranty deed

A general warranty deed has the most covenants (promises), such as seisin, quiet enjoyment, against encumbrances, and warranty forever. The seller defends title against claims from any time in the past.

Wrong choices

  • Quitclaim deed: A quitclaim deed makes no warranties at all.
  • Special warranty deed: A special warranty deed covers only the time the seller owned the property.
  • Bargain and sale deed: A bargain and sale deed implies the seller holds title but makes few or no warranties.
Practice questionReviewedForms of Ownership, Transfer, and Recording of Title › Deeds, Title Transfer, and Recording★★★★☆

Question 2. A deed that transfers whatever interest the grantor may have, with no warranties, is a:

  1. ① Special warranty deed
  2. ② General warranty deed
  3. ③ Trustee's deed
  4. ④ Quitclaim deed
▼ Show answer and explanation▲ Hide answer and explanation

Answer: ④ Quitclaim deed

Key point: No warranties = quitclaim deed

A quitclaim deed gives up any interest the grantor might have, without promising that the grantor has any. It is often used to clear a cloud on title or to transfer between family members.

Wrong choices

  • General warranty deed: A general warranty deed has the most warranties.
  • Special warranty deed: A special warranty deed warrants title during the seller's ownership.
  • Trustee's deed: A trustee's deed is used by a trustee and normally recites the trustee's authority.
Practice questionReviewedForms of Ownership, Transfer, and Recording of Title › Deeds, Title Transfer, and Recording★★★★☆

Question 3. Recording a deed in the public records gives:

  1. ① A guarantee that the title is free of defects
  2. ② Actual notice to everyone
  3. ③ Validity to an otherwise invalid deed
  4. ④ Constructive notice to everyone
▼ Show answer and explanation▲ Hide answer and explanation

Answer: ④ Constructive notice to everyone

Key point: Recording = constructive notice

Constructive notice means the law treats everyone as knowing what is in the public records, whether they looked or not. Actual notice is what a person really knows, such as seeing someone living in the property.

Wrong choices

  • Actual notice to everyone: Actual notice is knowledge a person really has, such as from seeing something.
  • A guarantee that the title is free of defects: Recording does not guarantee title; title insurance protects against defects.
  • Validity to an otherwise invalid deed: Recording cannot make an invalid deed valid.
Practice 5 questions from this unit →

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