Warranty Deed vs Deed of Trust

Started by JuanitaH • 12 replies • 6560 views

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JuanitaH (Texas)
Posts: 12

Posted:

I have a legal opinion, but want to throw this out there. Is it true that the Warranty Deed is what determines ownership of a property. So if your Governing Documents state that only members can run and a member is an owner, then they have to bee on the Warranty Deed and NOT a Deed of Trust?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Is there another problem here? Once you start picking apart details like this there has to be another issue. What is that issue or oncern? Go to your documents that will define what is considered a member. It may have where to verify that information. When in doubt...CC&R it out...

Former HOA President

JohnB26 (South Carolina)
Posts: 1,569

Posted:

deed of trust n. a document which pledges real property to secure a loan, used instead of a mortgage in Alaska, Arizona, California, Colorado, Georgia, Idaho, Illinois, Mississippi, Missouri, Montana, North Carolina, Texas, Virginia, and West Virginia. The property is deeded by the title holder (trustor) to a trustee (often a title or escrow company) which holds the title in trust for the beneficiary (the lender of the money). When the loan is fully paid, the trustor requests the trustee to return the title by reconveyance. If the loan becomes delinquent the beneficiary can file a notice of default and, if the loan is not brought current, can demand that the trustee begin foreclosure on the property so that the beneficiary may either be paid or obtain title.

JuanitaH (Texas)
Posts: 12

Posted:

Here is the meat of the matter. The Warranty Deed is only in the wife's name. As she had the house prior to marriage. They have obviously re-financed the house and both names are on the deed of trust. So like Governing documents, if there is a discrepancy, which one trumps WD or DT?

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By JuanitaH on 03/24/2012 5:43 AM
So like Governing documents, if there is a discrepancy, which one trumps WD or DT?

As you know I am not an attorney and do not work within the legal profession.

Since a trust deed legally transfers ownership in the land, and a warranty deed specifies who holds clear title to the land the last document executed and filed would be the one the Association goes with.

Per your post, the trust deed was the last one executed and it named both individuals as owners. Therefore, the two individuals would both be considered members and share all rights and responsibilities associated with membership.

Based on my experiences and on your posts, it appears that this goes deeper than a simple question about deeds and the board is trying to keep one of the individuals from doing something they want to do.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Just went thru this - in a way. Married in '71. His name was on warranty deed. We took out 2 home equity loans over the years, with both names listed as mortgagees. Married over 25 years. He dies in '09. I go to get an equity loan and the bank denies it - says the deed is in his name.

We have made out mutual Quit Claim Deeds in '04 as part of our trust set-up, so I just filed that. The home is now in my name.

Short answer: the one that is filed is the official one.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

There may be "two owners" but ONE vote per property in a HOA. A married couple with both their names on the title have to work together to figure out how to cast/use that one vote. Now that doesn't mean one of them can't be on the board. It doesn't double their voting more than any other board member. A board member will always carry one general membership vote. However, as an elected member from the membership to represent the whole of the general membership on daily issues, they have a board vote. Still one vote but different ways it is applied. Some decisions in a HOA take a majority general membership vote while others are board only votes.
If your concerned about a couple on your board then express that. Sometimes it's just a cultural acceptance thing than a following the rules situation. With too much apathy in a HOA this happens. We resolved this issue by stating that only one of the couple can be on the board at a time. They can switch out and run each year if they want. However, that is up to them as a married couple. How they sort out their one vote is up to them. The HOA just has to make sure that is recognized as 1 vote/1 member from that household.

Former HOA President

JuanitaH (Texas)
Posts: 12

Posted:

Thanks for your quick responses. Both WD and DT are filed. We are going to error on the side of kindness and take the advice of Tim.

JuanitaH (Texas)
Posts: 12

Posted:

Thank you! We will take your advice.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Any deed.

There are tons of different types of deeds. The most current deed is the one you should use to determine ownership. Doesn't matter what "type" of deed.

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

I've bought many types of properties, and I dont always get a warranty deed, although it is preferred. I can assure you, even though I didnt have a warrany deed, I was the owner.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Juanita,

I am basing this on the terms "warranty deed" and "deed of trust" as they are used in Arizona. Texas law may be different.

A warranty deed is a form of deed that conveys property from one party to another.

A deed of trust is not actually a deed; it is a financial instrument similar to a mortgage. A mortgage is a common-law instrument and subject to the common law as prescribed by the courts. The deed of trust is authorized by statutes. The primary difference between a mortgage and a deed of trust is that under the latter a lender may foreclose and sell the property at auction without filing a court action. As a result, foreclosure can occur in as little as 90 days under a deed of trust.

I have both a warranty deed and a deed of trust on my home in Arizona. The lender issued the deed of trust and the seller issued the warranty deed. Title to my home is the collateral that secures the deed of trust.

Under most circumstances I would assume that the same parties would be named on both the warranty deed and the deed of trust. In any event, ownership is determined by the warranty deed and not by the deed of trust.

KarenT (Washington)
Posts: 250

Posted:

Just to clarify....

When you borrow - the lender asks you to sign a Note (which is to promise to pay) that Note is secured by a Deed of Trust which is recorded and is considered a "security instrument", i.e, secures the Note. Typically there are three parties to the Deed of Trust, a borrower who gives the legal title of a real property to the trustee, a lender or a beneficiary who gives the loan, a trustee or a grantor who holds property for the benefit of the lender. When the loan is paid off, the note is stamped paid and the Deed of Trust is "reconveyed" recorded to release the lien.

A conveyance Deed is typically a Warrany Deed which conveys "ownership" of the property - you have only 2 parties a Grantor and a Grantee.

The title by a "conveyance" deed, i.e., Warranty Deed, Special Warranty Deed, QuitClaim Deed, Bargain and Sale Deed, etc... is who actually owns the property.

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