What Happens in a Deed?
John Rick, Esq.
Thousands of deeds change hands every day in Virginia. What happens in those deeds is rarely thought about. A brief review of what actually happens in a deed is very instructive.
The only way land can be conveyed is by a deed. Title to the land conveyed vests in the recipient once a deed has been delivered to and accepted by the recipient. At old common law, deeds had numerous formal parts, many with Latin names. Under modern practice, outlined in the Code of Virginia, the formal parts and old Latin names are dispensed with. There is no one form that satisfies the state code instruction. Technical words are not necessary. All that is required is words sufficient to show a purpose and intent to convey the real estate. Whatever the words, if a court can discover clear intention to convey the title to the real estate, they will give effect to the deed. In reviewing ambiguous deeds, the general rule for courts is that a deed must be upheld if it is possible. The law desires to uphold the validity of this particular kind of instrument whenever it can.
Unless words of limitation are included, a deed conveyance passes the fee simple estate. This means all of the real estate or other interests which the grantor has power to dispose of. Thus, the deed will be construed to include all buildings, privileges and appurtenances (such as easements) belonging to the land. A grantor, of course, can only convey the property that is owned. However, if the deed conveys property not owned by the grantor at the time the deed is executed, but the grantor subsequently acquires the property, then the deed has the same effect as if the grantor actually owned the land at the time of the deed.
The date of the deed is not essential. The true date of the deed is the time when the deed is delivered to the grantee. A deed, of course, is presumed to have been delivered at the date on it, or the date of the signatures, but the actual date of delivery can be different and is subject to proof.
The grantor and the grantee in a deed must be named sufficiently to be identifiable. Both grantor and grantee must be either a living person or an existing corporation or other legal entity. All that is required is that the grantee can be readily identifiable.
Deeds can be voided if executed under fraud or undue influence. The popular example is the circumstance where the grantee has gotten the grantor drunk in order to get a deed from him. But there are no special mental tests applied to a grantor. Even though a person has been judged insane, if they execute a deed and it can be proven they were competent at the time, the deed survives.
While consideration (something of value) is not necessary between a grantor and a grantee in order to create a valid deed, lack of legally sufficient consideration can leave the deed conveyance open to challenge by a creditor with a preexisting debt. It is for this reason that deeds routinely recite that “sufficient consideration” was paid. In the event of challenge, however, the actual consideration paid does have to be proven and evaluated by the court. The purpose of this requirement is to protect prior creditors against fraudulent conveyances of real estate which might be available to pay their debts. Interestingly, as the law often does, the rule changes with respect to creditors who become such after the conveyance. Lack of any valuable consideration in a deed between two persons will not affect that conveyance as to subsequent creditors. Another form of consideration which can end up being challenged in the court by creditors is the promise of future support by the grantee to the grantor of the land. If it can be shown that in fact such future support was never performed, then the deed can be found invalid as to preexisting creditors.
The most commonly encountered language in deeds is that the property passes with “general warranty.” The effect of this language is that the grantor warrants and defends the property for the grantee against claims and demands of all persons whatsoever.
The deed must contain some description or identification of the property conveyed. If the description is so uncertain that it fails to designate the land intended, then the deed is unsuccessful. The land must be described in a way that it can be distinguished from other land. Obviously then, a deed that conveys no particular piece of ground transfers no title to anything. The two methods of describing the land are (a) the metes and bounds method, which describes each boundary line by distances and directions, starting at one point and proceeding around the property until the description returns to the point of beginning, or (b) a plat of the property. Either is permissible.
At common law, waxed seals created an air of formality and also a presumption that sufficient consideration had exchanged between the properties. Today, the seal requirement has been largely relaxed by state law. The words may still appear on form deeds, but they are virtually never legally required at this time.
Once the deed has been delivered, it is then recorded at the circuit court clerk’s office in Virginia. The purpose of the recordation is to give constructive notice to all purchasers who try to acquire some interest in the property involved. Whether or not a purchaser does a title search, once the deed is recorded, the purchaser is charged with constructive knowledge of all of the effects of the deed on the title records. Thus, even though a conveyance from one grantor to another grantee is valid upon delivery, if the deed is not recorded at the courthouse, as required by state law, then the transaction is void as to any purchaser for valuable consideration who did not know about the transaction. The most obvious mischief this statute is created to protect against is that of the person who loves to sell the same piece of land over and over again. Once a grantee receives his deed to that land and puts it in the record room, any further selling by the happy-go-lucky grantor is ineffective and the unhappy second, third or fourth purchaser is out of luck.
The iron law of recordation brings with it yet another important detail. If the signature on the deed is not validly acknowledged under the notary public statutes, then recordation of the document is ineffective anyway.
This brief look at the inner-workings of a deed will give you some understanding of the detailed attention frequently paid to deeds in real estate transfer transactions. More importantly, it should alert you to the need to treat these documents with great care and make sure they are reviewed by persons who know what to look for.