Real estate is conveyed when title is transferred from one individual to another. Two types of deeds are commonly used to convey a real estate interest. These are:

  • grant deeds; and
  • quitclaim deeds.

The granting clause

To pass a fee simple interest in real estate, only the word “grant” needs to be used in the conveyance. No other precise words of conveyance are necessary in a deed to convey a fee simple ownership. [Calif. Civil Code §1092]

The word “grant” contained in the conveyance provision in a grant deed indicates the conveyance of a fee simple interest to another individual, unless the deed states a lesser interest is conveyed. [See RPI Form 404]

A quitclaim deed customarily uses the words “remise,” “release” or “quitclaim,” but does not contain the word “grant.” However, only the word “quitclaim” needs to be used to convey all interest held in the property by the grantor.

A quitclaim deed conveys only the grantor’s interest in a property, if any exists. A quitclaim deed can also be used in lieu of a grant deed to pass fee simple in the described real estate.

The words used to convey property are evidence of the future role an individual conveying title undertakes after the deed has been signed and delivered.

Thus, to convey real estate with covenants relating to the interest conveyed, a grant deed is used.

To simply convey any interest in real estate without an assurance the individual holds that interest conveyed, a quitclaim deed is used.

Grant deed covenants are implied

The covenants, sometimes called warranties, implied in a grant deed include:

  • the interest conveyed in the real estate has not been previously conveyed to another, except as disclosed in the grant deed; and
  • the real estate has not been further encumbered by the grantor, except as disclosed in the grant deed. [CC §1113]

Grant deed covenants are implied. Thus, they are not separately bargained for as provisions to be included in the grant deed conveyance.

If a grant deed covenant is breached by a grantor (seller), the grantee (buyer) may recover their money losses from the grantor for the breach of the implied covenant, as though the covenant had been written into the grant deed. [CC §1113]

The covenant against encumbrances

Real estate encumbrances include:

  • taxes;
  • assessments;
  • conditions, covenants and restrictions (CC&Rs); and
  • all liens, voluntary or involuntary, attached to the real estate. [CC §1113, 1114]

Encumbrances are the subject of the implied warranty against encumbrances in the grant deed, since they burden title and depreciate its value.

Encumbrances include:

  • CC&Rs, such as use restrictions running with the land;
  • building restrictions;
  • a reservation of a right of way;
  • an easement;
  • an encroachment;
  • a lease; and
  • a pending condemnation action. [Evans, supra]

Covenants restricted or limited

To avoid liability arising out of the implied covenants in a grant deed, the deed needs to state the title conditions (encumbrances) created by the seller during their ownership. These conditions are or are not agreed to by the buyer in the purchase agreement.

The implied covenants in a grant deed are waived by the buyer and do not apply when the seller and buyer agree to the contrary in the purchase agreement. In this instance, the buyer and seller list all the title changes made by the seller in the grant deed.

Covenants personal to grantor/grantee

Implied covenants are only for the personal benefit of a buyer, not future owners, referred to as remote grantees. The implied covenants in a seller’s grant deed to a buyer do not impose a condition on title and do not run with the land.

Thus, being personal to the seller and buyer, the implied covenants in a grant deed may only be enforced by the grantee named in the deed. Implied covenants cannot be enforced by future remote grantees who acquire the buyer’s interest at a later date.

Conversely, covenants running with the land, such as CC&Rs and easements, bind all future owners (remote grantees) of the property. Covenants running with the land are binding on future owners whether they take title by deed or court order as covenants running with the land affect title.

For a covenant to run with the land and affect all remote grantees, the seller creating the covenant needs to state in their conveyance that successors (remote grantees) are bound by the covenants and restrictions imposed on the property as contained in the deed. [CC §1468]

Purchase agreement merges into deed

Title conditions bargained for and agreed to in the buyer’s purchase agreement are merged into the grant deed accepted by the buyer on closing. [See RPI Form 150]

Thus, when a title condition, such as a reservation of an easement by a seller, is agreed to in the purchase agreement, it is to be restated in the grant deed if the condition is to become enforceable by the seller.

The title condition agreed to in the purchase agreement is extinguished on closing by the merger of the bargained for title condition into the grant deed. Thus, the grant deed becomes the sole remaining basis for enforcement of either the buyer’s or seller’s rights to title.

After closing, a purchase agreement provision affecting title is only enforceable if it is implied or stated in the grant deed.

However, if a title condition, covenant or CC&R is agreed to in the purchase agreement, but is erroneously omitted when escrow prepares the grant deed, the grant deed can be ordered corrected by a court, a legal process called reformation.

Once the grant deed is corrected to include the omitted title condition, the condition is then enforceable since it is present in the grant deed. [CC §3399]

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Conveying lesser estates than the fee

If a buyer of real estate receives an ownership interest less than fee simple, the grant deed needs to explicitly state the lesser interest being conveyed to the buyer.

For example, to convey a life estate, the grant deed states the grantee is to hold the property until the grantee’s (or some other individual’s) death, at which point the title will revert back to the grant or the grantor’s successors.

Quitclaim deeds: you have what I had

A quitclaim deed terminates any interest in the real estate described in the deed which may be held by the grantor.

Unlike a grant deed, a quitclaim deed does not carry with it the implied covenants contained in a grant deed. A quitclaim deed operates to release to the grantee all interest the grantor may hold in the property. [Platner v. Vincent (1924) 194 C 436]

Thus, a quitclaim deed passes whatever title, legal or equitable, the grantor possessed when signing and delivering the quitclaim deed, activity known as execution.

Lastly, a quitclaim deed is not intended to assure the conveyance transfers full fee simple ownership. In fact, the grantor who holds fee title and signs and delivers a quitclaim deed conveys fee simple ownership of the property including all the benefits of holding fee simple title. [Spaulding v. Bradley (1889) 79 C 449]

This article was originally published February 2016 and has been updated.