What Is Needed to Make a Deed Effective - dummies

What Is Needed to Make a Deed Effective

By Alan R. Romero

Delivering a deed means taking some action intended to make the deed effective presently. What that action is doesn’t really matter, but one obvious action is for the grantor to hand the deed to the grantee. Physically handing the deed to the grantee commonly creates a presumption of a delivery, whereas retaining possession may create a presumption of nondelivery.

The important part of delivering a deed is the grantor’s intent to make the deed effective by his action. The grantor may deliver the deed simply by gesturing to it or even by saying that it’s now effective.

On the other hand, even actions that would surely appear to be a delivery — such as physically handing it to the grantee — aren’t an effective delivery if the grantor manifests an intention for the deed not to be presently effective.

For example, the grantor hasn’t delivered a deed if he hands it to the grantee with the intent that the grantee deliver it to an escrow agent, who will keep the deed until the grantee finishes paying for the property. The grantor hands the deed to the grantee but doesn’t intend for the deed to be effective until later.

A deed doesn’t have to convey a present estate. The grantor can effectively deliver a deed that conveys a future interest. If the grantor hands over a deed that gives the grantee the right to take possession at the end of the year, that’s a valid conveyance of a future interest.

On the other hand, if the grantor hands over a deed that purports to give the property to the grantee immediately, but the grantor says that it isn’t effective until the end of the year, the deed isn’t effective because the grantor hasn’t delivered it.

As if that’s not confusing enough, consider this: If the grantor is still alive when the year ends and doesn’t repudiate his delivery before then, he’ll have effectively delivered the deed at the end of the year even without taking any further action.

Courts reach different results when the grantor hands over a deed to the grantee and indicates that the deed is effective only upon the occurrence of some condition in the future. Some courts hold that the grantor intended the delivery to be effective, albeit conditional, and that the grantor can’t impose such conditions on the grantee, so the grantor effectively delivered the deed. Such decisions simply disregard the conditions.

Other courts hold that the grantor hasn’t delivered the deed at all, because he didn’t intend the delivery to be presently effective. And some courts enforce the condition and hold that the deed conveyed title if the condition was fulfilled.

However, if the condition is that the deed will be effective when the grantor dies, courts generally agree that the deed is void because the grantor’s intent is to convey property at his death. Conveying property at death requires compliance with the formalities of the Statute of Wills.