Whether acting as a seller (grantor) or buyer (grantee), preparation and knowledge are essential to the success of a real estate transaction. For many people, a review of the state's laws governing real estate deeds is a good starting point. In Arizona, Title 33 of the Arizona Revised Statutes (2012) contains most of the important details.
The first requirement for nearly any real estate deed is that it must be in writing. The grantor must sign the deed in the presence of a notary public or other officer authorized to take acknowledgements (A.R.S. 33-401).
Arizona provides statutory forms for quitclaim, conveyance, and warranty deeds. These forms include the requirement for a recital of consideration (something of value, usually money), a description of the property, and the specific language that identifies the guarantees associated with each type of instrument (A.R.S. 33-402).
Quitclaim deeds proclaim the grantor's intent to "hereby quit claim to A.B. all my interest...." This deed makes no promises about anything -- it merely formalizes the fact that the grantor conveyed whatever interest they might have, if any, in a specific property (A.R.S. 33-402).
Conveyance deeds, however, by stating the intention to "convey to A.B..." contain implied covenants because of the word "convey." Basically, this is a promise that "an estate of inheritance or fee simple is to be passed, the following covenants and none other, on the part of the grantor for himself and his heirs, to the grantee and his heirs and assigns, are implied unless restrained by express terms contained in the conveyance: 1) that previous to the time of execution of the conveyance the grantor has not conveyed the same estate or any right, title or interest therein, to any person other than the grantee; 2) that the estate is at the time of execution of the conveyance free from encumbrances." (A.R.S. 33-402), (A.R.S. 33-435).
A warranty deed is similar to a general conveyance deed, but includes the promise to "warrant the title against all persons whomsoever," expanding the guarantees of title beyond the grantor and grantee named in the transaction (A.R.S. 33-402).
In addition to any covenants of warranty, Arizona conveyances of land contain the presumption that every "estate in lands granted, conveyed or devised, although other words necessary at common law to transfer an estate in fee simple are not added, shall be deemed a fee simple if a lesser estate is not limited by express words or does not appear to have been granted, conveyed or devised by construction or operation of law" (A.R.S. 33-432).
Co-ownership of real estate adds another decision for the grantees -- vesting (how to hold title). In general, "all grants and devises of real property made to two or more persons create estates in common." This specifically applies to two or more buyers who are not married to each other. Tenants in common are not eligible for survivorship rights to the property, which means that if one owner dies, the deceased's share of the property goes into his/her estate to be distributed in probate.
The survivorship option is available if, when taking ownership of the property, the grantees declare their wish to create a joint tenancy with right of survivorship. This way, if one co-owner dies, his/her interest passes to the surviving joint tenants without the need for probate.
Another option that is only available to married couples is community property with right of survivorship. As with a survivorship joint tenancy, this type of ownership allows the surviving spouse to gain full ownership in real estate without probate. A "grant or devise to a husband and wife may by express words vest the estate in the surviving spouse on the death of one of the spouses when expressly declared in the grant, transfer or devise to be an estate in community property with right of survivorship." (A.R.S. 33-431)
In general, married people who are at least eighteen years old may "convey their separate property without being joined by the spouse in the conveyance" (A.R.S. 33-451). Unlike most other states, this also applies if the property to be conveyed is identified as a homestead under A.R.S. 33-1101 (A.R.S. 33-453). Otherwise, both spouses must sign any deed conveying homestead property (A.R.S. 33-453). If the real estate conveyed by a married couple is held as community property, both spouses must sign the deed (A.R.S. 33-452).
In addition to the necessary content set forth by the property statutes, the recording statutes include additional requirements:
1) Each deed should have a title that states its purpose---"Warranty Deed," "Quitclaim Deed," etc.
2) Documents should be originals whenever possible, but clear copies are acceptable if the original is not available. All signatures, however, must be original.
3) The deed must be printed on paper that is no larger than legal-sized (8" x 14"), in minimum 10-point type.
4) The minimum margins are " on the top, bottom, left, and right, but the top margin on the first page must be at least 2", and the top left 3" of the first page should contain the name of the person requesting recording and a name and address for where the document should be sent after recording.
5) A deed that "modifies in any way the provisions of a previously recorded document must state the date of recordation and the docket and page of the document being modified" (A.R.S. 11-480).
After completing and executing the Arizona real estate deed, the next step is recording. Deeds must be submitted to the recorder's office in the county where the property is located (A.R.S. 11-468). Recording the deed as directed "shall be notice to all persons of the existence of such grant, deed or instrument" (A.R.S. 33-416). This final step in the conveyance process is essential: entering the change of ownership into the public record provides constructive notice to future purchasers.
Arizona follows a notice recording statute, which means that, while unrecorded transfers are valid between the parties to the deed (grantor and grantee), the grantor who, in violation of Arizona law (A.R.S. 33-411.01), fails to record the transaction, opens the grantee up to claims from future bona fide purchasers (buyers for value) (A.R.S. 33-411), (A.R.S. 33-412). If, as a result of the grantor's failure to record, the grantee must defend the title, A.R.S. 33-411.01 requires the grantor to "indemnify the transferee in any action in which the transferee's interest in such property is at issue, including costs, attorney's fees and punitive damages."
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