Before starting a real estate transaction, it's a good idea to become familiar with the local laws governing deeds. For Washington, D.C, review Title 42 in the DC Code (2012).
In accordance with the "Act entitled 'An Act to better define and regulate the rights of aliens to hold and own real estate in the territories,' approved March 2, 1897 (48 U.S.C. 1501-1507)," DC does not impose any residency restrictions or requirements related to who may buy or sell local land ( 42-901).
The Code contains basic forms for deeds, including specific language and minimum content requirements ( 42-601). Based on the statute, every real estate deed must contain:
- Signing (execution) date. The execution date identifies the day, month, and year the conveyance of land becomes effective.
- Grantor's name and address. The grantor is the seller. Provide the full names and addresses of everyone who owns a share of the property to be conveyed.
- Consideration. This represents something of value, usually money, that the grantee (buyer) gives to the grantor in exchange for the land.
- Grantee's name and address. Provide the full names and addresses of all grantees. In addition, if there are two or more grantees, enter the vesting choice. Vesting means holding title to the land. Washington, D.C. allows co-owners to hold title as tenants in common, joint tenants, and tenants by the entirety.
- Complete legal description of the real estate. The legal description should match the one on the deed conveying ownership to the grantors.
- Acknowledgement. The grantor(s) must sign the deed in the presence of a notary public or other official certified by the courts to administer oaths.
When two or more people decide to buy real estate together, one important decision is how they wish to hold title to the land. Washington, D.C. identifies three options: tenancy in common, joint tenancy, and tenancy by the entirety ( 42-516). Take the time to completely understand the positive and negative aspects of each type of ownership, as well as their potential impact on estate planning, taxes, and eligibility for asset-based benefits, among other things.
The default ownership status for multiple owners is a tenancy in common ( 42-516(a)). With this form of vesting, each co-owner gains a percentage of the property. The shares may be equal or unequal. The owners may act independently of one another, even selling his/her portion of the property rights. If one tenant in common dies, his/her portion reverts to the estate, and is distributed to the appropriate heirs as part of the probate process.
In joint tenancy, each co-tenant gets an undivided share of the whole property ( 42-516(b)). All joint tenants must act together to maintain ownership, so if one joint tenant sells his/her portion, the tenancy is broken and it becomes a tenancy in common. While permitted by statute, joint tenancy must be explicitly stated in the granting clause of the deed. For example: "AA conveys to BB and CC as joint tenants with right of survivorship and not as tenants in common." Note that the example contains a mention of survivorship. This means if one joint tenant dies, the survivors share the deceased's portion by function of law, and outside the probate process.
Tenancy by the entirety is the third option, and is similar to joint tenancy with right of survivorship. It is only available to spouses or domestic partners as defined in ( 32-701(3)). Like joint tenancy, tenancy by the entirety must be clearly stated in the granting clause of the instrument conveying ownership ( 42-516(c)). For example: "AA conveys to BB and CC, domestic partners, as tenants by the entirety."
In addition to the content, some deeds include covenants of title. A covenant is a promise between the grantor and grantee about some aspect or condition of the real estate ( 42-603).
A general warranty deed, identified by the words "generally warrant," contains a covenant by the grantor that he/she and any "heirs, devisees, and personal representatives will warrant and defend the said property unto the grantee, his heirs, devisees, personal representatives, and assigns against the claims and demands of all persons whomsoever" ( 42-604).
A special warranty deed, identified by the words "specially warrant," contains a promise that the grantor will "forever warrant and defend the said property unto the grantee, his heirs, devisees, personal representatives, and assigns against the claims and demands of the grantor and all persons claiming or to claim by, through, or under him" ( 42-605).
Some other guarantees are generally implied in conveyances, but may be specifically included by using the correct language.
- Covenant of quiet enjoyment. Identified by the words "that the said grantee shall quietly enjoy said land," the expanded meaning is "that the said grantee, his heirs, and assigns, shall, at any and all times after March 3, 1901, peaceably and quietly enter upon, have, hold, and enjoy the land conveyed by the deed or intended to be so conveyed, with all the rights, privileges, and appurtenances thereunto belonging, and to receive the rents and profits thereof, to and for his and their use and benefit, without any eviction, interruption, suit, claim, or demand whatsoever by the said grantor, his heirs or assigns, or any other person or persons whatever ( 42-606).
- Covenant against having encumbered land. Included by stating that the grantor "has done no act to encumber said land," this promise means that the grantor has "not done or executed or knowingly suffered any act, deed, or thing whereby the land and premises conveyed, or intended so to be, or any part thereof, are or will be charged, affected or encumbered in title, estate, or otherwise" ( 42-607).
- Covenant for further assurances. With this covenant, the grantor promises "that he will execute such further assurances of said land as may be requisite," meaning that the grantor, and any "heirs or devisees, will, at any time, upon any reasonable request, at the charge of the grantee, his heirs or assigns, do, execute, or cause to be done and executed, all such further acts, deeds, and things, for the better, more perfectly and absolutely conveying and assuring the lands and premises conveyed unto the grantee, his heirs and assigns, as intended to be conveyed, as by the grantee, his heirs or assigns, or his or their counsel learned in the law, shall be reasonably devised, advised, or required" ( 42-608).
The DC Code identifies other implied expectations and legal shorthand commonly found in real estate deeds. Every deed "shall be construed and held to pass a fee simple estate or other entire estate of the grantor or testator, unless a contrary intention shall appear by express terms or be necessarily implied therein" ( 42-701). Fee simple means absolute ownership. If the grantor wishes to convey a limited form of property rights, he/she must state that in the deed. The words "grant" or "bargain and sell" transfer the grantor's whole estate and interest in the property, whatever that may be. Any limitations must be clearly noted in the text of the deed ( 42-702).
Once the deed contains the correct content and language, it's ready to record. Recording is the act of entering the updated ownership status into the public record, providing constructive notice to future purchasers. Constructive notice is based on the expectation that before someone completes a legal process (in this case, purchasing real estate) he/she will examine the related public records to verify the information.
Washington, D.C. follows a race-notice recording act. This means even though a deed is effective between the parties when it is delivered to the grantee, the public, creditors, and potential future purchasers might not know about the change in owners ( 42-401). For example: AA conveys to BB, who does not record the deed. At this point, BB still controls the property. Later, AA deeds the same land to CC, who, after searching the records, finds AA still listed as the owner, completes the transaction and records the deed right away. Even if BB decides to record the deed, CC's interest will appear in the chain of title (ownership history). If/when a question of property rights arises, CC will typically keep the land because that's who recorded the deed first ( 42-406). To sum up, timely recording protects the grantee's interest in land.