Five Types of Deeds to Transfer Property In Florida

In Florida, a Deed is required to transfer ownership of a piece of property, regardless of whether that property consists of buildings or vacant land. Contrary to popular opinion, the title to the property is not conveyed by the Mortgage in Florida (the Mortgage creates a lien on the property). There are five (5) main types of Deeds in Florida that will be addressed in this article: (1) Warranty Deed; (2) Special Warranty Deed; (3) Quitclaim Deed; (4) Life Estate Deed; and the (5) Enhanced Life Estate Deed (Lady Bird Deed). Each of these Deeds have different affects that come with each of these Deeds, and it is important to know when receiving a property what type of title you will be receiving.

1.    Warranty Deed- Conveyance

            A Warranty Deed provides a full warranty of title that extends all the way through the chain of title, including the period before the grantor/seller owned the property. The general Warranty Deed is the most common type of Deed to transfer residential property in Florida and is most likely the type of Deed that you will find at the closing table of a home purchase or sale. The general Warranty Deed is considered the top tier Deed for ownership of a property.

2.    Special Warranty Deed- Conveyance

            A Special Warranty Deed transfers limited warranty of title to the grantee. This particular type of Deed guarantees that there are no defects or problems with the title during the time period grantor’s/seller's ownership but makes no promises about the condition of the title before the seller owned the property. Special Warranty Deeds are considered the mid-tier Deed for ownership, second to the Warranty Deed. In Florida, a Special Warranty Deed is most often used to transfer commercial properties, and while it is available in a residential transaction, it is uncommon. If you are being offered a Special Warranty Deed from a residential seller, inquire as to why they are unwilling to convey a Warranty Deed.

3.    Quitclaim Deed- Conveyance

A Quitclaim Deed passes the ownership interest in real estate to the new owner but makes no warranties regarding any defects or problems with the title. A Quitclaim Deed is the least desirable Deed to accept ownership of a property in Florida. The Quit Claim Deed is comparable to a used car dealership offering a used car, “as-is.” Once you drive it off the lot, or in this case, once you accept the Deed, you are stuck with any issues the property may have. In Florida, Quitclaim Deeds are often used to transfer property between family members, an individual to an LLC, an individual to a trust, or spouses in a divorce, among other reasons. Quitclaim Deeds often create exceptions to title policies, and are a tool used by owners to get rid of properties that may not otherwise qualify for conditional financing or title insurance. If you are not an expert at identifying risks and liabilities in the property’s chain of title, you should be very careful purchasing a property via Quit Claim Deed.

4.    Life Estate Deed- Estate Planning

             A Life Estate Deed is a grant of an ownership interest in a property, whereby the Grantor gives away true legal title and ownership to another person, while retaining the ability to use the property for the rest of their lifetime. At the execution and deliverance of this type of Deed, the Grantee becomes the fee simple remainderman, and the Grantor becomes a life tenant in the property. A house that is Deeded away via a Life Estate Deed bypasses the probate process and passes to the remainderman in fee simple at the death of the life tenant. Life Estate Deeds create a life estate in the person who granted the Deed and said life tenant is bound by the decisions of the remainderman as to whether they can sell, convey, or encumber the property. What this means is that if you grant your children a Life Estate Deed, and you live for another five years, for that five-year period you are no longer entirely in control of your property, nor would you be entitled to any of the money if you sold the property. You have a life interest, meaning you can stay there for your life but effectively the children would be the owner of the property and any decisions concerning the property would have to be approved by them.

5.    Enhanced Life Estate Deed- Estate Planning

            Also known as a Lady Bird Deed, an Enhanced Life Estate Deed is a special form of Deed that allows an owner to Deed the property to the beneficiary(ies) of their choice, but the Deed does not become effective until the death of the Grantor. This type of Deed is only available in a handful of states, and Florida is one of them. This allows the Grantor to revoke the Deed before their death, create a new Deed, sell the property, take out a mortgage, or any other activities conveying or encumbering title to the property, whereas a traditional life estate requires the Grantor to get consent from the Remainderman. This is a Deed used in estate planning where the owner wants to retain the ability to change their mind and this type of Deed allows the property to pass to the beneficiaries at the time of death of the Grantor, bypassing the probate process in Florida. This Deed is almost always recommended when a parent is looking to add their child to a deed “just in case something happens.”

Conclusion

            There are quite a few different types of Deeds in Florida, and this article is certainly not an exhaustive list. The Deed that is right for you will depend heavily on the specific facts of your situation. Reach out to us today if you would like to discuss which type of Deed you are looking for!