Anyone with an interest in property ownership should be aware of the various types of Deeds in Colorado. Since most people don’t know about the differences, we’ll break down the most common Deeds used in Colorado and the purposes they serve.
Basically, a Deed is a document that transfers ownership of a real piece of property. But what is “real” property in this sense? Well, think about the concept in terms of real estate. Real property is used to describe immovable property such as buildings, homes, and lands.
There is often a bit of confusion about the difference between a title and a Deed. The physical aspect of the document is what separates the two, as a title references the notion of ownership rights while a Deed is an official legal document declaring ownership of a property.
You’ll generally see five types of Deeds in Colorado:
- General Warranty Deed
- Special Warranty Deed
- Bargain and Sale Deed
- Quitclaim Deed
- Beneficiary Deed
What is a General Warranty Deed in Colorado?
A General Warranty Deed is perhaps the most common. With this type of document, the grantor (or seller) fully guarantees ownership of the title to the grantee (buyer) and warrants to defend the title.
Keep in mind that there are five warranties/covenants included with a General Warranty Deed:
- Covenant of Seisin – Grantor is guaranteed power to convey property as well as ownership.
- Covenant Against Encumbrances – A covenant that there are no encumbrances against the property. The only exceptions are any encumbrances listed in the Deed.
- Covenant of Quiet Enjoyment – The grantee is guaranteed peaceful possession of the property. Thus, the grantee is provided a remedy in the situation that the grantee is deprived of possession of the property or evicted.
- Covenant of Further Assurances – The grantor is required to deliver any necessary instruments in order to protect the property title.
- Covenant of Warranty of Title – Similar to the Covenant of Quiet Enjoyment, ensuring the title is given to the grantee.
Understanding the Limitations of a Special Warranty Deed
Meanwhile, a Special Warranty Deed doesn’t contain all of the aforementioned covenants. A Special Warranty Deed specifically guarantees defects in the title while the property was owned by the grantor.
Understanding Rare Colorado Deed Types: Bargain and Sale
With a Bargain and Sale Deed, a grantor’s present and future interests are shown. This type of Deed is rarely used; it can be revoked by the grantor as long as they are alive.
What is a Quitclaim Deed in Colorado?
A Quitclaim Deed in Colorado is a legal document used to transfer whatever ownership interest a person has in a property to another party, without making any promises, guarantees, or warranties about the title. Because there is no protection against title defects, quitclaim deeds are typically used between trusted parties, such as family members or divorcing spouses.
A Quitclaim Deed solely focuses on the present interest in the title. It only transfers whatever title the grantor holds, without warranting that the grantor holds any title. These Deeds are not recommended for arm’s length transactions and are generally used for transferring ownership interests to related parties.
How Does a Colorado Beneficiary Deed Work?
Finally, a Beneficiary Deed is often used as an estate planning tool in which a beneficiary is designated who will receive the property upon the death of a grantor. The Deed is revocable and must meet other statutory requirements, including a requirement that the Beneficiary Deed must have been recorded prior to the death of the grantor.
Get Help with Colorado Deed Types: Contact Law One
Need help drafting or executing a property deed in Denver? Property transfers carry long-term legal consequences. Contact the experienced Denver real estate and estate planning attorneys at Law One to ensure your property rights are fully protected.
