What Is a Grantor?
Definition and Examples of a Grantor
"Grantor" is a legal term used in real estate transactions to identify the seller of a property. The grantor transfers title to a grantee through a legal instrument known as a deed.
Closing attorneys usually ensure that deeds documenting the transfer of a title are recorded at the county courthouse in the jurisdiction where the property is located. This provides certifiable proof that a legal transfer occurred.
What Is a Grantor?
Grantors are identified in both deeds and mortgage documents. The grantor on a mortgage is actually the borrower. A grantor is anyone who transfers real estate to another individual or entity or who encumbers it by taking out a loan and subsequently allowing a lien against the property.
How Does Being a Grantor Work?
A grantor can convey various types of deeds. It depends on the state. Each type of deed has its own rules and guidelines, so what's recognized in Iowa might not be accepted in California.
Buyers and sellers should always sit down with their attorneys ahead of time to determine the type of deeds they will use to convey or receive property and why.
Many title companies are reluctant to provide advice regarding deeds to homebuyers and sellers, and for good reason. Deeds are legal documents. Title company employees, such as title officers and escrow officers, generally aren't lawyers, so they're prohibited from providing legal advice.
Types of Deeds
Deeds can convey and confirm various issues:
- A grantor who conveys a "general warranty deed" confirms that the title is good and marketable. No liens exist on the title that might prevent them from selling the property, and they have the legal right to sell it. General warranty deeds protect grantees against claims to the title dating back to a property's origins. They offer buyers the greatest amount of protection in a real estate sale, but not every state recognizes them.
- The grantor of a "special warranty deed" bears no responsibility for any title defects that occurred before they owned the property. Grantees have limited protection when they receive property by a special warranty deed because there's always the possibility that an issue predating the seller could come back to haunt them.
- The grantor of a "grant deed" conveys their property with a guarantee that they have not concurrently sold the property to someone else. They also guarantee that there are no additional liens or encumbrances on it other than those that they have disclosed. A grant deed contains the names of the grantor and grantee, and a description of the property that's being transferred, such as the tract number, lot number, and address.
- The grantor of a "quitclaim deed" makes no guarantee that they have any legal right to convey the property. They might not even legally own the property. They can convey the Statue of Liberty to you via a quitclaim deed, but this doesn't mean you'll own it because they don't own it or have a right to transfer it to you.
Quitclaim deeds typically aren't used by grantors and grantees who don't know each other very well. This type of deed is most often used among family members to pass properties to heirs, and in divorce cases where one spouse is relinquishing an ownership interest in the property to the other.
Other Documents Naming Grantors
Real estate deeds typically name a grantor and grantee, but other documents require the identity of these parties as well.
Landlords and renters have a grantor-grantee relationship, and seller and buyers of motor vehicles have one as well. You'll encounter grantors and grantees when dealing with wills and financing contracts, and certain business arrangements and partnerships can require the establishment of a grantor-grantee relationship, although this isn't as common.
Requirements for Deeds
It's vitally important that a deed identifies both the grantor and grantee, and that it includes a full description of the property in question. Deeds with murky language run the risk of exposing buyers and sellers to lawsuits.
Luckily, deeds are not forever. They can be modified by the grantor or by the grantee to include covenants and other restrictions stating how a property can be used, sold, or otherwise reclaimed. Always make sure to obtain a title insurance policy just in case.
- A grantor is an individual who is granting, conveying, or selling property to another individual or entity.
- A grantor can also be someone who has encumbered a property by taking a mortgage lien against it.
- All property deeds should include the identity of the grantor and the grantee, the individual or entity that’s taking the property, as well as the full legal description of the property.
- Deeds can usually be modified by either the grantor or the grantee.