Virginia Real Estate: Types of Deeds

So you have decided to purchase or sell some property. One of the issues that can come up during the sale of property is the type of deed that should be used. A deed is a document that formally transfers ownership of property from one person to another. Deeds come in various types. Each type has its own benefits and risks.

If you are thinking of purchasing or selling a property, you need to be aware of these types of deeds.

Quitclaim Deed

This is the first, and weakest, type of deed. This type of deed is rarely a good idea. A quitclaim deed conveys whatever interest the seller has in the property to the buyer. This means that a seller may not even have proper title to the property, and could be selling the buyer bad title.

A quitclaim deed can also limit the type of ownership the new buyer has to the same type of ownership the seller has. For example, if the seller has a life estate, the buyer would only get a life estate.

Therefore, it is important to know that a quitclaim deed can be dangerous.

Special Warranty Deed

The second type of deed is the special warranty deed. This type of deed is one step above a quitclaim deed. It gives a specific type of title to the buyer and comes with several warranties. A special warranty deed can protect a buyer from issues of title created by the seller.

For example, if the seller negligently causes a mechanic’s lien to be issued against the property prior to or during closing, a special warranty deed would protect the buyer.

However, a special warranty deed does not protect a buyer against issues that come up as a result of the negligence of prior owners.

General Warranty Deed

This is the strongest type of deed. This type of deed comes with several warranties and protects the buyer from any conditions caused either by the seller or prior owners of the property. This is the ideal type of deed to have when buying property, and it is the most valuable type of deed.

If you obtain a general warranty deed, you can bring a lawsuit against a seller for any issues of title, whether it was the seller’s fault or prior owners.

Why you need a real estate lawyer.

A lawyer can help you determine what type of deed is best for your particular case. Sometimes, you don’t need to have a general warranty deed, and can save on the costs associated with that type of deed. However, you need to be aware of all the risks associated with having a lesser type of deed. Therefore, before closing on any real estate transaction, seek legal counsel. That way, if there is an issue down the line, you will know your rights.

Virginia Real Estate: Joint Land Ownership

If you are investing in property with a business partner or a family member, you need to know about the various ways that both your ownership interests can be structured. I last spoke about the different types and sizes of ownership interests. This article is dedicated to balancing the interests of multiple owners.

So how can property be owned by more than one person, and what are the benefits and negatives of each type of ownership.

Tenancy in Common

This type of ownership is most common between non-family members. A tenancy in common is where there are multiple people who have an ownership interest in a property. For example, three business partners could purchase a property together and all own the property as tenants in common. The partners are not required to have equal ownership interest in the property. Therefore, you can use this type of arrangement to have majority shareholders in the property.

The negative of this type of ownership style is that it does not common with a “right of survivorship.” This means that if one of the business partners pass away, the property will not automatically be divided between the remaining business partners. Instead, the property will be divided pursuant to that business partner’s estate planning documents.

Joint Tenancy

This type of ownership can be between either family members or business partners. The difference between a joint tenancy and a tenancy in common is that all members of a joint tenancy must have equal shares in the property. Furthermore, a joint tenancy must be created at the same time by the same deed. This makes planning a little more difficult. However, a joint tenancy can also have a “right of survivorship” if the appropriate language has been included in the deed. This makes the transfer of property much smoother in the event that one of the other owners are deceased.

Tenancy by the Entirety

The final major type of ownership interest with multiple individuals is restricted to husband and wife. A tenancy by the entirety is an ownership structure whereby both the husband and the wife own the property together.

There are several benefits to electing to utilize a tenancy by the entirety. The major benefit is that debt collectors cannot put a lien on the house unless the debt is owed by both the husband and the wife. Therefore, if one party has significant student loan debt, this may be the ideal ownership style.

The largest negative of this ownership structure is related to divorce or bankruptcy. If there is a mortgage on the house and someone needs to file bankruptcy, it may force both parties to file a joint bankruptcy. Alternatively, if the parties are getting divorced it will impact property distribution.

Why You Need a Lawyer

A lawyer is important in preparing to purchase property to help advise you on which type of ownership structure is best for your particular case. The list above is limited, and does not cover all potential types of ownership. Nor does the list fully explain all possible negative or positive consequences of each ownership structure. Consult with a lawyer before signing a deed so you have the ownership structure that protects you the most.

Virginia Real Estate: Types of Land Ownership

If you are a landowner or are thinking about purchasing land, there are several things you need to know before you begin your investment. Land comes in several different shapes, sizes, and types of ownership. These types of ownership can have significant impacts on several other aspects of your life including estate planning, liability for injuries on the property and much more. Ownership can be defined by several factors including how long you can stay on the land, what you are allowed to do on the land, and what other people who invested with you can do with the land.

So what are the major types of land ownership?

Fee Simple

This category of land ownership refers to a complete grant of title to the property. If you own land in fee simple, you own the land outright. The types of limitations that can be placed on a fee simple ownership are limited. A common example of a fee simple ownership is if your grandmother were to deed you complete ownership of the family farm. Common limitations on ownership may include that you are required to continue operating the land as a family farm. In the event that you fail to continue to operate the land as a family farm, you may potentially forfeit your rights to the property under some situations.

The law further splits up fee simple ownership into several subcategories, but those subcategories are best discussed with your real estate lawyer.

Life Estate

The next category of land ownership is a life estate. A life estate is a grant of ownership in land for a limited period of time. This period of time is commonly measured by the land owner’s life span. A common example of a life estate is if your grandmother were to deed you the family farm for your entire life time, the family farm to pass on to a grandchild at the time you are deceased.

Leasehold Interest

The next major category of land ownership is a leasehold estate. The most common example of a leasehold estate is a leasing agreement with a landlord. Upon signing a leasing agreement, you have an interest in staying in the land pursuant to the terms of the lease. Another example that is common in the rural United States is a leasehold farming interest. Many farmers in the rural United States lease farming land from the federal government. Some private industries also do this type of leasehold estate. For example, a cocoa farm may lease a house and the land to a tenant for farming purposes.

Condominiums

The last major category of land ownership is a condominium. A condominium is a larger property that has been split into several pieces. These pieces are then sold to individuals. These individuals are then allowed access to common areas, but must pay for upkeep of those common areas. This type of ownership structure is common in major metropolitan areas.

Why You Need a Lawyer

If you are considering purchasing land or selling land, it is important to know what your options are for categories of land ownership. You can bargain certain types of land ownership to increase or decrease the costs of ownership. Knowing your specific needs and outlining those needs can help you acquire the type of land ownership best for you. The categories above are not an exhaustive list of types of ownership.

Virginia Probate: What to Do if You Are Left Out of a Will

Sometimes people are left out of their family's will. This can create distrust and animosity among family members. Sometimes people are accidentally left out of the will. Other times, the family member intentionally decided to disinherit them. 

Either way, a disinherited family member may still be entitled to some compensation from the depending on when the will was drafted and whether the action was intentional or unintentional.

So who is entitled to receive compensation even if they are left out of the will, and how much are they entitled to?

Children Born After the Will's Creation

The first category of individuals that may be left out of a will are omitted children. This category is dedicated to children who are born after the will is executed. If the will does not explicitly waive the interests of children born after the will is created, then those children are entitled to a share of the estate’s assets.

An omitted child may be entitled to two different types of compensation depending on how the will is written. If there are other children who receive assets under the will, then the omitted child will likely be entitled to at least the same amount of compensation as those other children. If no child receives compensation under the will, then they are entitled to an equal share of the assets depending on how much is left after other claims.

Marriages After the Will is Written

It is not uncommon for a person who drafted a will to either marry or remarry after their will is created. If they do not update their will to reflect their new marriage, then there may be some problems. A new spouse, or an "omitted spouse," is entitled to receive compensation from an estate even if their name does not appear in the will. An omitted spouse is entitled to receive the same amount of money as if there had been no will.

Spouses Intentionally Left Out of a Will

Even if a person does not remarry after creating a will, and intentionally leaves nothing to their spouse, the spouse is entitled to compensation from the estate. This is known as an “elective share.” An elective share may be either a third or a half of an estate, depending on whether there are any surviving children or omitted children.

Why You Need a Lawyer

If your relative left you out of their will, either intentionally or unintentionally, it is important to have a lawyer walk you through your rights and how to request compensation from an estate. There are many different calculations that come into play depending on the type of heir you are, and when the will was written. If you have been left out of a will, seek out legal counsel as soon as possible.

Virginia Probate: Duties of an Executor

So you have been appointed to be an administrator or an executor of an estate. You probably have several questions of what your duties and responsibilities are. These are important questions to have answered, as failure to perform your job well may result in personal liability.

So what are your duties as an executor or administrator? Here is a partial list of those duties.

OPEN THE ESTATE

The first thing that needs to happen is to timely open the estate. Your first stop should be a local probate lawyer so you can have guidance for your particular case. However, the first court official to interact with is the probate clerk. You need to schedule a meeting with your local probate clerk and to get information related to what documentation is required to open the estate.

Common examples of required documentation include copies of the will and any accompanying documents and a certified death certificate. You need to bring these to the probate clerk where your family member last lived.

PROVIDE ACCOUNTINGS

After the case has been opened, you will have to provide the court with several accountings. These accountings are supposed to show the flow of money both into and out of the estate. For example, if there is cash sitting in a bank account, that must be accounted for. If that money is used to pay a creditor, that must also be accounted for and provided to the court.

You will have to file several accountings, at least once a year.

CREATE AN INVENTORY

If there is any personal property, that will need to be detailed on an inventory. This document will catalogue personal property such as jewelry, clothes, vehicles, tools, etc. The purpose of an inventory is to notify the court and various officials as to what property is available if something needs to be sold to satisfy a debt. It also allows the court to disburse that property if there is a specific bequest in the will.

RESPOND TO CREDITORS

Throughout a probate proceeding, creditors are likely to file proofs of claim detailing their claims to the estate. You may need to respond to these claims and hold hearings on the sufficiency of these claims.

WHY YOU NEED A LAWYER

A lawyer is important because you need to meet all of these obligations. Failure to do so may result in personal liability. Therefore, before you begin any of this work, consult a probate lawyer near you. Always keep in mind, you may not have to serve as an executor if you don't feel comfortable doing so.

ADDITIONAL RESOURCES

Virginia Bar Association's Guide to Probate Administration