When you are buying or selling real estate, one of the critical documents required to complete the transaction is a deed. The deed is a legal document that officially transfers title and ownership of real property. It is signed by both the buyer and seller and is typically recorded at the register of deeds office.
There are, however, different types of deeds that are typically used in New Jersey to convey different rights of ownership:
- A Quitclaim Deed — A quitclaim deed, fairly common in real estate transactions, makes no guarantees about the right and title of the person conveying the property. It transfers whatever interest the seller has—no more and no less. Quitclaim deeds are frequently used when property is transferred between family members or between divorcing spouses. The property subject to a quitclaim deed is customarily given, rather than sold, to the recipient. Quitclaim deeds may also be used if there is a “cloud” or lien on the title—the quitclaim deed, however, conveys the property with the lien still in force
- A Warranty Deed — The warranty deed, probably the most commonly used form of property conveyance, carries an express promise that the sell has good and clear title—free of liens or encumbrances. As a general rule, the warranty deed includes a provision whereby the seller will incur all costs if there turns out to be any cloud on the title. There’s a variation of the warranty deed known as the “special warranty deed,” which limits the warranty to any liens or encumbrances placed on the property during the seller’s ownership.
- A Bargain and Sale Deed — The bargain and sale deed is akin to the quitclaim deed, but covers property that is typically sold, rather than given away.
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