Deed of Absolute Sale vs. Deed of Assignment
A deed of absolute sale and a deed of assignment both transfer property ownership from one party to another. People use a deed of absolute sale most often in a typical real property sale in which a buyer purchases a property from a seller. Bankruptcy courts most often use a deed of assignment to transfer property from the property owner to the bankruptcy court. Take a look to learn more about the deed of assignment versus absolute deed of sale meaning and better understand how these affect the parties involved.
What's a Deed of Assignment?
A deed of assignment occurs when a debtor transfers property to a creditor, usually a bankruptcy court trustee. The bankruptcy court trustee is then responsible for facilitating the sale of the property. Once the property sells, the trustee splits the proceeds equally among the creditors. The creditors then apply these proceeds to the debtor's outstanding balances.
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Property Exclusion in Bankruptcy
Insolvent debtors are not required to complete a deed of assignment to the bankruptcy court. Bankruptcy courts often allow an exclusion for the insolvent debtor's primary home . Depending on the debtor's location, there may be a limit to the home equity allowed for the exclusion. However, the bankruptcy court may require insolvent debtors to complete a deed of assignment for additional real properties, such as second homes and vacation homes.
This means the insolvent debtor may keep his primary home – with consideration for any home equity limits – from inclusion in the bankruptcy proceedings. However, the bankruptcy court may require him to complete a deed of assignment on his secondary or vacation homes to sell and use the proceeds toward paying his creditors.
Absolute and Conditional Sales
Property sale transactions are typically either conditional or absolute.
Conditional sales occur when the transfer of the property from one party to another party will not be completed, and the title to the property will not be transferred until certain conditions of the sale contract are met either by the buyer or by the seller. For example, if a property has outdated plumbing, the buyer can require the seller to update the plumbing as a condition of the sale.
An absolute sale occurs when the sales contract has no conditions. This means that the property transfer will happen as long as the buyer pays the seller the amount of money agreed on.
Absolute Deed of Sale Meaning
To understand a deed of sale vs deed of absolute sale, know that a deed of absolute sale is a when a seller transfers or conveys the title of a property to the other party without condition except for the payment for the property. For example, a seller lists her property for $100,000, and a buyer comes along and gives her $100,000 for the property without requiring her to do anything to the property. A deed of absolute sale is completed, and the title of the property transfers from the seller to the buyer.
- Upcounsel: Deed of Assignment: Everything You Need to Know
- USLegal: Absolute Sale
- Amourgis & Associates Attorneys at Law: What Property is Considered Exempt in an Ohio Bankruptcy?
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What Does a Deed Show?
How to Correct Quitclaim Deeds
While deeds may vary slightly in format, there are certain essential elements that must be included to convey property unquestionably. Language in a deed may also vary, depending on the intentions of the parties. Some deeds may recite restrictions, reservations and encumbrances related to the property, while others may contain just enough information to legally complete the transfer.
Grantor and Grantee Names
For property to transfer from one person to another, there must be a grantor and grantee named in a deed. In a sale, the grantor is the seller and the grantee is the buyer. A grantor should use the same name to transfer property that he used to acquire it, and a grantee should make sure that he is acquiring title in a correct name. If the grantee is taking title in the name of his business, he should be certain that the business is properly formed. Property doesn’t transfer to an entity that hasn’t established a legal existence. It is also wise to title property in the complete name of an individual, such as with a “Jr.” or “Sr.” designation to avoid future confusion over whether father or son owns the property.
Method of Holding Title
Language in a deed determines how the grantee owns the property. In the case of multiple grantees, they may take title as joint tenants with rights of survivorship. If two or more people own property with rights of survivorship, it means that upon the death of one, the property automatically transfers to the survivor. Without those survivorship provisions, property ownership passes through the estate of a deceased individual.
One essential element that may be inadvertently omitted when recording a deed is the legal description. The preparer of the deed may intend to attach a lengthy legal description as an exhibit to the deed but neglects to do so prior to recording. If the property is not described in the deed, it cannot transfer to the new grantee.
Warranties and Exceptions
A large majority of deeds are general warranty deeds in which the grantor warrants or guarantees the property title to the grantee. Encumbrances such as restrictions on the property, reservations of minerals, or easements will often appear on the deed as exceptions to the warranties being given. Types of deeds that do not offer warranties, or offer only limited warranties, are quitclaim deeds and statutory warranty deeds. While warranty deeds convey property with the words "grant, bargain, sell and convey," quitclaim deeds usually convey with language similar to "remise, release, quitclaim and convey." A statutory warranty deed offers warranties from the date the seller received the property until he transfers it but not prior to that time. Quitclaim deeds offer no title warranties.
Execution and Acknowledgement
The grantor must sign the deed, usually in the presence of a notary public who is familiar with acknowledgements in the state. The grantor or the notary public should also date the deed on the day of signing. If a notary acknowledgement is defective or doesn’t meet state requirements, a correction deed may be required at a later date to correct the conveyance. State laws vary as to whether additional witnesses are needed.
- Stewart Virtual Underwriter: 4.16 Deeds of Conveyance
- LoneStarLandLaw.com: Deeds in Texas
- Social Security: SI ATL01110.510 Shared Ownership (RTN 12-01 – 03/2012)
- The Florida Bar Journal: Five Tips Every Real Estate Practitioner Should Know About Defective Deeds
- University of Arkansas at Little Rock: Deed Covenants of Title and the Preparation of Deeds: Theory, Law, and Practice in Arkansas
- National Notary Association, Notary Bulletin: Hotline Tip, How Many Witnesses Need To Sign A Grant Deed?
- Florida Housing Coalition. "Sample Warranty Deed." Accessed March 30, 2020.
- Sacramento County Public Law Library. "Sample Grant Deed." Accessed March 30, 2020.
- Sacramento County Public Law Library. "Sample Quitclaim Deed." Accessed March 30, 2020.
- Sacramento County Public Law Library. "Sample Interspousal Transfer Deed." Accessed March 30, 2020.
Marie Murdock has been employed in the legal and title insurance industries for over 25 years. Murdock was first published in print in 1979 and has been writing online articles since mid-2010. Her articles have appeared on LegalZoom and various other websites.
Deed of Assignment. Zurich International Life. 1. This Deed of Assignment is made this: Notes on completion
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- 6 years ago