Explains the kinds of property deeds used in Pennsylvania and provides an overview of the title transfer process.
In Pennsylvania, you can transfer property you own to another person or entity in several ways. Each conveyance method has its own deed form, which may vary from county to county.
TL;DR (Too Long; Didn't Read)
To transfer property in Pennsylvania, you'll need to prepare and execute a deed and record it in the county where the property is located. If the transfer was in exchange for money, you'll have to pay transfer tax.
Transferring by Quitclaim Deed
A quitclaim deed allows you to transfer whatever claim you have in a specific property to another party or entity. When you transfer property with a quitclaim deed, you aren't making any kind of guarantee or warranty that you actually hold title to the property or that the title is unencumbered – only that you're transferring to the other party whatever claim you may have.
Most property owners use a quitclaim deed to transfer property to a relative for little or no consideration. Parents may transfer a house or farm to a son, for example, or a husband may transfer his interest in jointly-held property to his wife as part of a divorce agreement. In many cases, transfers through quitclaim do not involve a sale; the "price" is often minimal, usually for one dollar or 10 dollars.
A similar deed instrument occasionally used in Pennsylvania is the Special or Limited Warranty Deed. When the conveying party quits claim to the property but offers some limited guarantee – that affirms the acreage of the property, for instance – real estate professionals sometimes use a Special Warranty Deed instead of a Quitclaim deed.
Using a Trust Deed
A trust deed shares the name "deed" with the other kinds of deeds used in Pennsylvania, but it is essentially a mortgage instrument, transferring title from the seller to the buyer's trustee, rather than to the buyer. The trustee holds the deed as security for the lender until the mortgage has been paid off and then transfers interest to the buyer. In the event the buyer defaults, the trustee transfers the property interest to the mortgage holder instead or, alternatively, may sell the property at a foreclosure auction, then pay the mortgage holder the proceeds.
Transfer by Warranty Deed
Warranty deeds are the most frequently used property conveyance instrument in Pennsylvania. The deed guarantees that the title being conveyed is free of encumbrances. The warranty deed further guarantees that in the event of any dispute about title, the seller or the seller's representative – usually a title company in Pennsylvania – will defend the buyer's title. If the title cannot be defended, the title company must convey the purchase price back to the buyer. A warranty deed is what you get when you buy a house from a stranger. You must go to a closing after the title company determines what is needed to transfer clear title.
How to Proceed with a Property Transfer
Detailing the conveyance process for any of these deeds goes beyond the scope of this article, but here are some general guidelines:
- Consider getting professional assistance. Each Pennsylvania county has its own deed forms. Within a single category, there may be sub-types, each with its own form. One of Nolo's websites, Real Estate Lawyers, lists 13 different kinds of Warranty Deeds used in Pennsylvania. Using a real estate lawyer when buying or selling property in Pennsylvania can save you time and provide a guaranteed result.
- Get help from the title company guaranteeing the deed to avoid the expense of a lawyer. This can provide many, but not all, of the benefits of legal assistance.
- Use a deed form provided by one of several companies that offer these online. Deeds.com, for example, provides individual forms for every Pennsylvania county and deed type. When you enter the Deeds.com website and specify the county and form you need, you'll get a lot of valuable information, including the deed form itself, a line-by-line guide to the form, a completed example of the deed you've chosen, realty transfer tax forms and an accompanying guide to the transfer tax. Most of Deed.com's forms cost less than $20.