Section 47 of the Residential Purchase and Sale Agreement states “Except as otherwise agreed by the Parties in writing, Seller shall convey marketable title to the Property by Statutory Warranty Deed, or, if applicable, by personal representative’s deed, or trustee’s deed or similar legal fiduciary’s deed that meets the requirements for conveying interests in real property contained in ORS Chapter 93.”
There are several types of deeds that can be used in real property transactions. The normal set are (1) Statutory Warranty Deed, (2) Special Warranty Deed, (3) Bargain and Sale Deed, (4) Quitclaim Deed, and (5) Fiduciary Deeds. The decision on what deed to use is going to be something for the Buyer and Seller to determine, and they are advised to have an attorney assist in the decision.
1) Statutory Warranty Deed [ORS 93.850]
The Statutory Warranty Deed is the standard absolute conveyance of the property, with five assurances to the Buyer of the land. It passes all of the Seller’s interest in the land unless the deed specifies otherwise (e.g. one half of Seller’s interest in Blackacre). Statutory Warranty Deeds are the default deed for Brokers in Oregon real property transactions. The Buyer can rely on the below five covenants [promises by the Seller to the Buyer]:
(a) Seller is selling their entire interest in the property on conveyance date;
(b) Seller, Seller’s heirs and assigns will not be able to bring lawsuits asserting ownership of or entitlement to the land, and the deed passes any “after-acquired title” [if Seller doesn’t own the property now (it belongs to Seller’s ailing mother), sells it, then later gains ownership through inheritance, the sale is still valid and the Seller’s ‘after-acquired ownership’ automatically transfers to Buyer];
(c) The land is free and clear of encumbrances unless Buyer accepts it with encumbrances as written into the deed [covenant of freedom from encumbrances];
(d) Seller is the rightful owner of the property [covenant of seisin], and Seller has the right to convey the property to Buyer [covenant of marketable title];
(e) Seller will defend Buyer in any title lawsuits regarding the Property, [covenant of warranty] (e.g. someone comes along and claims that they adversely possessed the eastern 20’ of the property during Seller’s ownership, Seller will appear in the lawsuit, pay for Buyer’s lawyer, and assist in combatting these claims).
Covenants (c), (d), and (e) will always be considered a part of the deed, as though they had been written into the deed. Covenants (a) and (b) do not survive the closing and are extinguished [merger doctrine].
2) Special Warranty Deed [ORS 93.855]
Special Warranty Deeds do all of the same things as the Statutory Warranty Deed, except for covenant (c) freedom from encumbrances and covenant (e) are slightly limited. In a Special Warranty Deed, the Seller only guarantees that the land is free from encumbrances “created or suffered by” the Seller. Seller will only defend Buyer in title lawsuits where the complainant claims ownership by, through, or under the acts of the Seller. In other words, the Seller will only guarantee the encumbrances and will only defend the lawsuits that happened while Seller was there.
3) Bargain and Sale Deed [ORS 93.860]
Bargain and Sale Deeds only guarantee covenants (a) and (b). A bargain and sale deed essentially just says “I am selling the whole property, as described on the deed” and “I can’t claim I own it anymore after I sell the land to you”
4) Quitclaim Deed [ORS 93.865]
Quitclaim Deeds guarantee nothing, and only transfer “whatever title or interest, legal or equitable” that Seller had at the time of conveyance. “[if Seller doesn’t own the property now (it belongs to Seller’s ailing mother), sells it, then later gains ownership through inheritance, Buyer does not own the property, they bought Seller’s nonexistent interest in the land and no after-acquired title rights] Quitclaim deeds can be written for things Seller doesn’t own. It would be valid to have a Quitclaim Deed reading “I, Seller, convey to you, Buyer, all of my ownership interest in the northern half of the Moon.” Buyer would be buying all of Seller’s rights [which means: no rights at all] in the property.
5) Fiduciary Deeds [ORS 93.870, permitting other forms of deeds]
Fiduciary Deeds are typically just Bargain and Sale Deeds or Quitclaim Deeds for personal representatives, trustees, and conservators who hold and administer property for another person. Oftentimes, the fiduciary will use a special form of deed to give notice that they are a fiduciary, not the actual owner, that they have no knowledge whatsoever about the condition of the deed or title and that they were not transferring the property fraudulently.
In the case of Personal Representatives, ORS 116.223 explains that a Personal Representative’s Bargain and Sale Deed does not put the Personal Representative in the chain of title unless they are also an heir or successor [e.g. John Doe dies, home put into estate; John Doe’s child is the Personal Representative who would inherit the house; John Doe’s child sells the house; chain of title will show “John Doe -> John Doe’s Child -> Buyer,” rather than “John Doe -> Buyer”]
Note: a “Trustee’s Deed” is separate from a “Deed of Trust/Trust Deed”. A Trustee’s Deed is a deed from a Trustee of a Trust, transferring property to a third-party. A Deed of Trust is a deed from a Buyer to a third-party in a seller-carried transaction, setting the third party up as a “trustee” who will hold the Buyer’s Property and foreclose it if the Buyer fails to pay off their promissory note with Seller.