Botched Deeds

As an estate planning lawyer in Colorado, I have the unique opportunity to see title problems caused by poorly drafted deeds. Here are just a few of the many deeds problems or “botches” we have seen over the years.

The Joint Tenancy Botch

In order to take title to real estate as joint tenants with right of survivorship, a deed must make a specific reference to taking title as joint tenants. There is no presumption of joint tenancy. Absent specific language referencing the joint tenancy, the grantees (the buyers) take title as tenants in common. Upon the death of one tenant, there is no automatic passing of title to the remaining tenant when the real estate is held as tenants in common.

The Automatic Transfer Botch

In the same vein as the joint tenancy botch is the automatic transfer at death botch. Many people think that property held as joint tenants with right of survivorship automatically passes to the remaining joint tenant at the death of the first joint tenant. For example, husband dies leaving wife as the sole owner of the family home. Legally, title may pass automatically upon death. However, there must be proof of the death recorded in the county real estate records. In Colorado, this proof is the death certificate and something called a supplemental affidavit. See Colorado Revised Statute 38-31-102.

The A/K/A Botch

“A/K/A” stands for “also known as.” John David Doe may use several variations of his name over the years. For example, he may originally take title to real estate using his full legal name (John David Doe). He may then sell the real estate and transfer title using the name John Doe or John D. Doe. This creates a cloud on the title. As a general rule, when transferring real estate, the grantor (the seller) should use his name as it appears on the deed transferring title to him.

The Legal Description Botch

This botch occurs when the legal description of the property is not the same as the property being sold. This botch occurs two ways. First, there can be an error made when typing the legal description on the deed. Second, this error can occur when the legal description is taken from a source other than the previously recorded deed. When transferring real estate, the legal description of the property should be taken directly from the previously recorded deed. A common error is to take the legal description from the deed of trust securing the loan on the property. A deed of trust is not the same document as the warranty deed. The legal description of the property should be the same, but sometimes there is an error on the deed of trust.

The Deed to a Dead Person Botch

In order to avoid probate and lawyer fees, some people will execute a deed transferring real property but prohibit delivery and recording of the deed until their death. In some cases, the person receiving the gift dies before the grantor. As a general rule, deeds to dead people are void. However, some courts will try to give effect to the grantor’s intent.

The Deed by a Dead Person Botch

In the same vein as the deed to a dead person botch is the deed by a dead person botch. In order to avoid probate and lawyer fees, some people will execute a deed in the name of a dead person. This is done by the person who held a general financial power of attorney on behalf of the deceased. The deed purports to transfers title from the deceased to the heirs of the deceased. Upon death, the general financial power of attorney terminates. The deed executed by the power holder transfers nothing.

The Quit Claim Deed Botch

Last but not least, there is the quit claim deed botch. A quit claim deed is a deed that transfers title from the grantor to the grantee without any warranties. The grantor is transferring whatever title she held, and nothing more. The general public views quit claim deeds as an easy, inexpensive way to transfer title. Nothing could be farther from the truth.

Quit claim deeds, like all types of deeds, have a specific purpose when properly used. When improperly used, they not only cause title problems but can void title insurance. These are just a few of the many ways to botch a deed to real property. Fortunately, title insurance companies either correct the problems or insure around them. It is best, however, to avoid the problems in the first place.