OREGON STATUTORY DEED FORMS
The Oregon legislature codified four statutory deed forms in 1973: (1) Warranty Deed; (2) Special Warranty Deed; (3) Bargain and Sale Deed; and (4) Quit Claim Deed. This article will discuss the distinctions between the forms.
Warranty Deeds
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The form of Warranty Deed is prescribed by ORS 93.850.
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A Warranty Deed conveys the grantor's (seller's) entire interest in the real property, and warrants that the real property is free from encumbrances, except those specifically described in the deed. Additionally, this deed conveys all "after-acquired title" and prevents the grantor and their heirs, successors, and assigns from claiming that they conveyed an estate or interest less than what the deed purports to convey.
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The warranty deed includes the statutory covenants that the grantor owns the estate that is being conveyed, that the grantor has the right to convey the estate, that the property is free from encumbrances except as specifically set forth in the deed, and that the grantor warrants and will defend the title to the property.
In Oregon, the warranty deed is the most widely used form of deed.
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Special Warranty Deed
The form of Special Warranty Deed is prescribed by ORS 93.855. A special warranty deed “conveys and specially warrants” real property, and the title is to be “free of encumbrances created or suffered by the grantor except as specifically set forth” in the deed.
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A statutory special warranty deed is substantially similar to a warranty deed, except that the covenant of freedom from encumbrances is limited to those encumbrances “created or suffered by” the grantor. Additionally, the duty to defend title is limited to defending against persons who lawfully claim title “by, through or under” the grantor.
This deed is primarily used to convey title when the property was purchased through a land sale contract, after the last payment has been made.
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Bargain and Sale Deed
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The form of bargain and sale deed is prescribed by ORS 93.860. The bargain and sale deed “conveys’ real property and does not refer to encumbrances on the title.
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Like the warranty deed, and the special warranty deed, the bargain and sale deed conveys “the entire interest in the described property at the date of the deed which the deed purports to convey,” includes conveyance of after-acquired title, and prevents the grantor from asserting that it had an interest less than that set forth in the deed.
The fundamental difference between the bargain and sale deed and the warranty deed or special warranty deed is that the bargain and sale deed does not include any covenants of title. Accordingly, a buyer of property under a bargain and sale deed should strongly consider title insurance as part of the transaction.
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Quit Claim Deed
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The form of quit claim deed is prescribed by ORS 93.865. The quit claim deed “releases and quitclaims” to the grantee “all right, title and interest in” the real property described in the deed.
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The statute dictates that a deed in the form prescribed by the statute “shall have the effect of conveying whatever title or interest, legal or equitable, the grantor may have in the described property at the date of the deed but shall not transfer any title or interest which the grantor may thereafter obtain nor shall it operate as an estoppel.” Accordingly, a quit claim deed does not include after-acquired title, and does not prevent the grantor from asserting that they had a lesser estate than that described in the deed.
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A quit claim deed is typically used to release an interest in the property, or to clear up a cloud on title, such as one between family members or spouses in a divorce, an interest in a defaulted or abandoned land sale contract, a terminated lease, or other interest.
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This form should be used with caution.
Conclusion
If you are entering a residential transaction, with title insurance, on OREF forms, you will likely use a warranty deed to convey title. However, in any transaction that does not include title insurance, the choice of deed form can be extremely important to both the buyer and the seller. Using the wrong deed form for the seller could result in exposure to liability to title defects that the seller did not create. Using the wrong deed form for the buyer could result in a total loss – no title, and no recourse against the seller.
Consulting with a real estate attorney can prevent these issues, usually at a low cost to the consumer.
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Howell, LLC Real Estate Law advises both buyers and sellers entering real estate transactions, and also represents buyers and sellers in dispute resolution when things have gone wrong.
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Tyler Howell
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(503) 710-2566
Disclaimer: This article does not create an attorney client relationship, and nothing herein can be construed as legal advice.