Legal Definitions - grant deed

A grant deed is a legal document used to transfer ownership of real estate from one party (the grantor, or seller) to another (the grantee, or buyer). It provides a specific, but limited, set of promises from the seller to the buyer regarding the property's title.

Specifically, when a seller uses a grant deed, they are making two key promises:

• They have not previously sold or transferred the property to anyone else.
• During the time they owned the property, they did not create or allow any undisclosed financial claims (such as liens) or other burdens (encumbrances) to be placed on the property that would affect the buyer's ownership.

The critical distinction of a grant deed is that these promises only apply to the period when the seller actually owned the property. It does not guarantee that there were no title issues, liens, or encumbrances on the property before the seller acquired it. If a problem from a previous owner's time later comes to light, the buyer typically bears the risk and responsibility for resolving it.

Examples:

• Residential Home Sale with an Undiscovered Prior Easement: Sarah purchases a suburban home from Mark using a grant deed. Mark had owned the house for 12 years. Five years after Sarah moves in, a utility company informs her that they need to access a buried pipeline running through her backyard, citing an unrecorded easement that was granted 25 years ago, long before Mark ever owned the property. Because Mark transferred the property with a grant deed, he only guaranteed that no such issues arose during his 12 years of ownership. Since the easement predates his ownership, Sarah, as the grantee, is responsible for dealing with this unexpected access requirement.

• Family Property Transfer: An elderly parent, Mr. Henderson, decides to transfer his vacation cabin to his daughter, Lisa, using a grant deed. Mr. Henderson has owned the cabin for 30 years and is confident about its history during his ownership. Lisa trusts her father and is generally aware of the property's background. In this scenario, a grant deed is often chosen because of the existing relationship and shared knowledge. Mr. Henderson guarantees that he hasn't created any new title issues during his three decades of ownership. Lisa accepts the risk of any potential issues that might have existed before her father acquired the cabin, which she considers low given her family's long history with the property.

• Commercial Property Sale with a Historical Boundary Dispute: A small manufacturing company, "Precision Parts Inc.," sells its factory building to "Global Logistics LLC." They use a grant deed for the transfer. Precision Parts had owned the building for 8 years. Global Logistics conducts extensive due diligence but agrees to the grant deed, understanding that Precision Parts is only guaranteeing the title for the 8 years they owned it. A year later, a neighboring property owner initiates a dispute over a property line encroachment that occurred 20 years ago, well before Precision Parts acquired the building. Because Precision Parts used a grant deed, their guarantee only covered the 8 years they owned the property. The property line issue predates their ownership, so Global Logistics, having accepted the grant deed, would be responsible for resolving this older encroachment.