Grant Deed

A grant deed is a deed that conveys real estate with limited implied warranties — fewer than a full warranty deed but more than a quitclaim deed. It is the standard ownership-transfer deed in California and is used in several other Western states. By using the word "grant," the grantor makes two basic implied promises: (1) they have not already conveyed the property to someone else, and (2) the property is free of undisclosed encumbrances created by the grantor. Unlike a general warranty deed, a grant deed does not warrant against defects arising before the grantor owned the property, and the grantor does not promise to defend the title in court.

The two implied covenants

1. No prior conveyance — the grantor has not already sold or transferred the same interest to another party.
2. No undisclosed encumbrances by the grantor — the grantor has not placed liens or encumbrances on the property that weren't disclosed.

These covenants are limited to the grantor's own actions and period of ownership. For protection against older, hidden defects, buyers rely on title insurance rather than the deed itself — which is exactly why grant deeds plus title policies are the norm in grant-deed states.

Grant deed vs. warranty deed vs. quitclaim

Think of a spectrum of buyer protection: a general warranty deed (most protection, covers the entire title history) → a special warranty deed or grant deed (middle, covers only the grantor's ownership period) → a quitclaim deed (least protection, no warranties). In practice, the gap is bridged by title insurance, so a grant deed with a strong owner's policy can give a buyer practical protection comparable to a warranty deed.

Why a grant deed matters in note transactions

In an owner-financed deal in a grant-deed state, the borrower typically takes title to the collateral property by grant deed, paired with title insurance, while financing part of the price with a note secured by a deed of trust. When that note is later sold, a note buyer's title search and due diligence confirm the deed type and the existence of a title policy. A grant deed backed by title insurance signals reasonably clean collateral, supporting a solid offer. A note buyer would be more cautious if the property had moved by quitclaim or if no title policy exists.

Example

In California, a seller conveys a home to a buyer by grant deed, and the buyer obtains an owner's title policy. The buyer finances the purchase partly through a seller-carried note secured by a deed of trust. When the seller sells the note, the note buyer sees a standard grant deed plus title insurance — typical, clean collateral that supports a competitive price for the note.

This entry is general information, not legal advice. The covenants implied by a grant deed and which deed is customary vary by state; consult a qualified attorney or title professional.