The Different Types Of Legal Deeds In India And Their Significance

Difference Between Deed and Agreement

The fundamentals of contract law are to offer and acceptance- an intention to be legally bound on consideration. Consideration forms the stem for an agreement, the parties need consideration to show that they have ‘bought’ the promise by doing some act or providing something in return for the promise. In contrast to the agreement or contract, there is no requirement for consideration for a deed, consideration is not mandatory, a deed does not need consideration because of the idea that a deed is the most solemn indication that the parties are intended to be bound.

Types of Deeds

Warranty Deed

This type of deed is largely used for residential real estate sales. Warranty deed acts as a guarantee to the buyer where the seller has all the right to sell the property, and also the property is free from debts and other liabilities, in spite of the warranty deed. If any problems arise the buyer has the right to claim for compensation from the seller.

Special Warranty Deed

A Special Warranty Deed is not as same as the warranty deed. Here the seller’s guarantee, given to the buyer will not cover the entire property. Generally, the seller only guarantees for the problems which are created during the seller’s ownership of the property. A special warranty is most often used for commercial property transactions. It transfers all the rights to the buyer but warranties only what is specifically mentioned.

Quitclaim Deed

Most often Quitclaim deed is used by the family members, spouses and mostly by people who are well acquainted with each other which allows one party to transfer property rights and claims to another party.

Bargain and Sale Deed

This deed is typically used for the sale of the court seized properties or real estate sales. In this case, it generally does not guarantee to the buyer that the seller owns the property free and clear.

Grant Deed

A grant deed transfers an interest in a property from the seller to the buyer in exchange for an agreed upon price. It guarantees that the seller absolutely owns the property free from all debts, and it does not provide a guarantee for the defects of the title like the warranty deed.

Fiduciary Deed

This fiduciary deed is used to transfer property when the grantor is a fiduciary such as a trustee. This deed only warranties that the fiduciary is acting in his allotted capacity and authority.

Trust deed

A trust deed is a written instrument which transfers property to a trustee to secure an obligation such as a promissory note or a mortgage. The trustee has the right to sell the property in the case of a default made in the obligation.

Therefore, different types of deeds exist to facilitate the buyer and the seller but the most important fact is that before executing a deed it is mandatory to read all the terms and conditions of the deed to avoid problems in future.