Deed of Bargain and Sale?

[matbec]

Hi. Does anyone know what the difference is between this type of deed and a warranty deed? Are there any problems associated with getting this kind of deed for a timeshare, rather than a warranty deed?

Thanks in advance.

 

[Conan]

This seems about right:
http://en.wikipedia.org/wiki/Bargain_and_sale_deed

It's very similar to a quitclaim deed. Basically it means that you can't sue the seller if it turns out there was a flaw in your title. So if title is a concern you need to investigate it before you pay.

 

[Talent312]

Hi. Does anyone know what the difference is between this type of deed and a warranty deed? Are there any problems associated with getting this kind of deed for a timeshare, rather than a warranty deed?

There are problems with this type of deed, but if a thorough title search has been done or title insurance purchased, they may be acceptable. Here is a brief discourse:

1. General Warranty Deeds warrant title against any claims and encumbrances whatsoever (except those listed, like taxes). Special Warranty Deeds, instead of a blanket guarantee, may limit its warrranty to the holding of title and right of conveyance. The first are commonly used in residental transactions and the latter for commercial transactions.

2. Bargain and Sale Deeds do not warrant anything except that the grantor has the right to make a sale and has done so in accordance with law. Such deeds are often used by government officials or fiduciaries that hold the property by force of law, such as properties seized for unpaid taxes, sold in execution of a judgment or held by a court-appointed receiver or custodian. Such deeds are a cut above Quitclaim Deeds in that a "quitclaim" is really only a release, whereas this deed confirms that there was an actual sale made.

 

[Dave H]

There are problems with this type of deed, but if a thorough title seach has been done or title insurance purchased, they may be acceptable. Here is a brief discourse:

1. General Warranty Deeds warrant title against any claims and encumbrances whatsoever (except those listed, like taxes). Special Warranty Deeds, instead of a blanket guarantee, may limit its warrranty to the holding of title and right of conveyance. The first are commonly used in residental transactions and the latter for commercial transactions.

2. Bargain and Sale Deeds do not warrant anything except that the grantor has the right to make a sale and has done so in accordance with law. Such deeds are often used by government officials or fiduciaries that hold the property by force of law, such as properties seized for unpaid taxes, sold in execution of a judgment or held by a court-appointed receiver or custodian. Such deeds are a cut above Quitclaim Deeds in that a "quitclaim" is really only a release, whereas this deed confirms that there was an actual sale made.

Talent 312:

In that it lacks the basic warranties, most likely not insurable with title insurance. Since they are used for force of law type sales, my mean the holder could have to perform a quiet title action to clear any issues with title.

I will give you it is a cut above a QCD, but I sure would not want to own a property this way, unless the reason was I needed to quiet the title and then would own with a truly clear title and could then get title insurance.

 

[Talent312]

Talent 312:
In that it lacks the basic warranties, most likely not insurable with title insurance. Since they are used for force of law type sales, [it] may mean the holder could have to perform a quiet title action to clear any issues with title.

I will give you it is a cut above a QCD, but I sure would not want to own a property this way, unless the reason was I needed to quiet the title and then would own with a truly clear title and could then get title insurance.

Agreed. However, if the price was so low that I was determined to proceed, I'd pay a title company to provide a documented title+lien search, examine that, go thru whatever court files might be pertinent and examine the estoppel letter from the resort (or hire an attorney to do it for me). It might be worth the risk.

 

[matbec]

Thanks for your responses, everyone.

I purchased a timeshare via private resale, and when I first reviewed the draft documents, everything looked fine. I guess I was a little too quick . I now have the recorded deed and I was surprised to see "Deed of Bargain and Sale" at the top of the document. The footer of the document does say "Warranty Deed" and that's what led me to believe this is what I was getting. I went back to the drafts and, sure enough, the drafts did say "Deed of Bargain and Sale". The estoppel letter from the resort did indicate that there is no outstanding mortgage, all fees are current and paid to date. Talent312, the taxes are included in the maintenance fees, so I'm thinking that there are no taxes owing. I have since contacted the closing company to see what I can do about this, if anything.

Rklein001, I read the link you provided and the one thing that's easing some of my worries about this being a problem is that the following paragraph appears on the deed:

Grantors do for Grantors and Grantors' heirs, personal representatives, executors and assigns forever hereby covenant Grantee that Grantors are lawfully seized in fee simple of said premises; that the premises are free from all encumbrances, unless otherwise noted above; that Grantors have a good right to sell and convey the same as aforesaid; and to forever warrant and defend the title to the said lands against all claims whatever.​

Now, if I read this paragraph correctly, the sellers have added warranties that:
1) they have legal ownership of the TS
2) there are no encumbrances, as none were noted anywhere on the deed
3) they have the right to sell the TS
4) the title is defensible against all claims
Have I read this right? If so, I guess I'll wait to see what the closing company says before I start hitting the panic button (if at all).

I didn't pay a horrendous amount of money for this TS, but it wasn't pennies either. Is there any other course of action any of you would recommend, that wouldn't cost me scads of money or time or effort?

Dave H, what is a "quiet title action" and how does one go about performing this?

 

[Talent312]

... the one thing that's easing some of my worries about this being a problem is that the following paragraph appears on the deed:

Grantors do for Grantors and Grantors' heirs, personal representatives, executors and assigns forever hereby covenant Grantee that Grantors are lawfully seized in fee simple of said premises; that the premises are free from all encumbrances, unless otherwise noted above; that Grantors have a good right to sell and convey the same as aforesaid; and to forever warrant and defend the title to the said lands against all claims whatever.​

... [W]hat is a "quiet title action" and how does one go about performing this?

The language you quote matches exactly that which is commonly used in Warranty Deeds. The text takes precedence over whatever label may be at the top of the document. So, I'd say that you do have in substance what is, effectively, a Warranty Deed.

It may never come up, but the problem, as I see it, is that the indexes of the public records will identify the deed by its heading and rarely do title examiners take the time to see if its something different. Thus, an assumption will be made that you have less than a full warranty deed.

I'd look at my contract to see if it specified a Warranty Deed. If it did, I'd ask the closing agent to do a "Corrective Warranty Deed" to eliminate the offending title. If the contract is silent on this issue, I'd still do it. But would I go thru the expense of filing a suit to force the execution of a new document called a "Warranty Deed?" Dunno.

A "quiet title action" is a lawsuit that you would file in the court where the property is located which challenges all possible adverse claimants in effect to "put up or shut up." The optimal result is a judgment which says you are the sole owner and if anyone wants to quibble, they can take a hike. Since you have "color of title," absent some issue with a boundary line or other adverse claim, its probably not worth the expense.

 

[Dave H]

Talent:

Great answer to that question. I agree if it was not that much money it would not make a difference.

Sounds like the buyer has the covenants of warranty and is in great shape. Sounds more like a Bargain and Sale Deed with covenants deed.

 

[matbec]

Thank you both for your comments. Makes me feel a much better about the deed itself, although I have asked the closing agent what would be required to secure a corrective warranty deed.

While we have no plans at the moment to get rid of this newest addition to our TS portfolio, well, never say never ...

Thanks again.