There are many different types of property deeds but only one type of title. A title is clear evidence that shows exactly who the owner of the property is. When a person purchases a property, the title company gives them a title insurance policy proving who is able to legally transfer the deed in a future sale. Typically, the title is held by the lender until the loan is paid off.
There are five major types of deeds in Arizona: warranty deed, quitclaim deed, deed in lieu of foreclosure, deed of trust and tax deed. Let’s review each one in turn.
- Warranty deeds (either general warranty deed or special warranty deed) transfer the title to a buyer and promises them that they do in fact own the property.
- Quitclaim deed is used to convey ownership of a property to a person who is not on the loan or mortgage. This alienates the mortgage lender and many banks are starting to state up front that no quitclaim may be done prior to a short sale. A quitclaim deed could result in causing a load to be called due.
- Deed in lieu of foreclosure is a legal deed between the owner of the property and the bank stating that the owner agrees to walk away from the home and give the keys to the bank. This does damage the owner’s credit, but typically the bank will agree not to pursue for deficiency. Tax liabilities are still the responsibility of the owner.
- Trust deed (deed of trust) is issued to the buyer of a property until the mortgage is paid in full.
- Treasurer deed is issued by an official when a person buys a property because the owner is delinquent in taxes. This can sometimes be tricky because most states have many ways for the delinquent tax payer to rectify the situation.
There are many ways to take title in Arizona and AZ is a community property state. This means all property acquired by a husband and wife after marriage is community property. Community property is a method of co-ownership for married people only. Should one of the spouses die, their holding interest shall pass by either a will or an intestate succession.
- Joint tenancy with the right of survivorship gives title to the last survivor.
- Tenancy in common is where parties do not have survivorship rights and each owns a specific undivided interest in the entire title.
- Severalty is sole and separate real property owned by an individual before marriage. If a married person acquires title to property in severalty, his or her spouse must execute a disclaimer deed to waive their interest.
- Corporate title can be issued provided the corporation is duly formed and in good standing in the state of its incorporation.
- General partnership is a voluntary association of two or more persons as co-owners in a business for profit.
- Limited partnership is formed by two or more individuals under the laws of Arizona and having one or more general partners as well as one or more limited partners.
Be sure you know exactly which method is right for your situation in Arizona. Check with your attorney or legal advisor.
