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Common Types of Land Deeds in Michigan

by | Apr 27, 2022 | Firm News |

Private land is bought, sold, or transferred using deeds. This Blog will address the four most common types of deeds in Michigan and what each of the different types guarantee.

Warranty Deed
A warranty deed provides the strongest protection to a buyer. The “warranty” refers to several warranties, guarantees, or covenants that the seller gives to the buyer. The covenants include that the seller owns the land and has the right to sell it; that there are no undisclosed interests such as mortgages, liens, or leases; that the buyer will not have their possession disturbed by someone else claiming an interest, and that the seller will defend the buyer from anyone claiming a superior interest to the buyer. Because of the knowledge required to make the covenants, warranty deeds are most commonly used for land the seller has occupied as a residence or used as a rental.

Covenant Deed
A covenant deed provides some protection to the buyer, but less than a warranty deed. It provides only the covenants or guarantees specifically listed in the text. The most common covenant is that the seller has not done anything itself to create any competing interests in the land. This avoids the seller being responsible for defending against older interests it may not know about. Because of the limited guarantees, covenant deeds are useful for land the seller has not occupied or used. An example is land that has been foreclosed, or surrendered to a bank.

Quitclaim Deed
A quitclaim deed provides the least protection to a buyer. The seller transfers the interest it has in the land, which may be nothing at all. The seller makes no covenants about competing interests, and the buyer must accept any that exist. The buyer is expected to know or investigate the land on their own. Because of the lack of protection for the buyer, quitclaim deeds are most commonly used to transfer land between family members, or between individuals and their own businesses.

Ladybird Deed
A ladybird deed is not used for a sale, but instead as an estate planning strategy. Owners transfer the land to beneficiaries, normally their children or other family, but reserve certain rights to themselves. The reservations include the right to occupy the land for their lifetime, and the right to cancel the transfer by selling the land to someone else first. This gives the owner the option to move or downsize, but if they happen to die while still owning the land, then the beneficiaries can receive it while avoiding probate court.

Are you buying, selling, or transferring land? We at Tilchin & Hall, P.C. have many years of experience in these matters, and we are available to assist you in choosing and preparing the best deed for your transaction. Please reach out to us at (248) 349-6203 or email us using the form below.

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