Real Estate Documents

Most real estate issues can typically be resolved by drafting appropriate documents for everyone’s signature. Litigation is usually unnecessary unless a dispute arises.

Resolving Real Estate Issues with Documents

An attorney frequently drafts deeds, easements, and road agreements to: 

• Resolve property ownership issues
• Provide access to a property 
• Establish shared arrangements for driveways 
• Prepare water well agreements 

Ownership of real estate can lead to situations where a deed is needed to transfer rights or resolve past ownership problems on the title.

Beneficiary Deeds and Avoiding Probate

One way to avoid real estate going through probate when you pass away is to use a Beneficiary Deed, as permitted by Section 461.025 of the Missouri Non-Probate Transfers Law. 

• This allows for a “will-like” provision to be included in a deed, naming a beneficiary or beneficiaries, with the condition that the deed only takes effect upon the death of the owner or the last surviving owner if there are multiple owners. 

The language used must comply with Missouri law, and the Beneficiary Deed must be recorded before the owner’s death to properly avoid probate. While the deed is effective upon recording, it does not take effect until the owner’s death. 

This setup enables the owner to retain the ability to sell the property, take out a mortgage, or take any other action that full ownership allows, as the beneficiary has no current interest in the property while the owner is still alive. 

The Beneficiary Deed can be revoked by recording a revocation deed or by recording another deed unless the original beneficiary deed explicitly states that it is irrevocable.

**Special caution is necessary when only one spouse owns the property and wants to use a Beneficiary Deed. Specific language for the deed regarding the signature of the non-owner spouse must be drafted by a real estate attorney.

Types of Deeds in Missouri

Different types of deeds are used to transfer property, and it is important to understand the difference between a general warranty deed, a special warranty deed, and a quit claim deed in Missouri.

General Warranty Deed

A General Warranty Deed is the best option for property buyers. 

• This type of deed contains language in which the seller guarantees that they have an undisputed ownership of the property, known as “an indefeasible estate in fee simple.” 
• It also states that the seller has the right to transfer the property and that there are no existing claims or encumbrances on the property except for those already recorded. The seller agrees to guarantee and protect the title from any legal claims made by anyone regarding any issues related to the property’s title, dating back to when the U.S. government issued the patent.

 This language is considered the most comprehensive in a property deed, and most title companies that insure buyers’ interests in the property will require the use of a General Warranty Deed in the property sale.

Special Warranty Deed

A Special Warranty Deed limits the seller’s warranty in defending against lawful claims. The seller only agrees to defend against actions for which they were responsible during their ownership of the property. 

This means that a full, clear title is not guaranteed. When lenders foreclose on a property, they usually use a Special Warranty Deed to transfer the real estate to a new buyer because they do not want to take on any liability for issues with the title that may have arisen before they took ownership of the property after the foreclosure.

Quit Claim Deed

Quit Claim Deeds are often used when a general warranty deed or special warranty deed should be used instead. 

In a Quit Claim Deed, there are no warranties, so it is the least desirable for purchasers. When transferring property between owners, it is best to keep the chain of warranties intact by using a general warranty deed to transfer the real estate. 

In addition to containing no warranties, a Quit Claim Deed simply conveys whatever title interest the granting party has. If they have no interest, it conveys nothing.

A Quit Claim Deed is most suitable when a party needs to release or grant any potential interest in a property to the current owner. This helps in clearing up any title defects, especially when the party may or may not have an ownership or lien interest in the property.

Ownership Structures When Multiple People Own Property

When multiple individuals own a property together, they can hold their interests as:

• Tenants in Common
• Joint Tenants
• Tenants by the Entireties

Tenancy in Common:

If you see “John Doe and Sam Smith” on the deed, it means the ownership is Tenants in Common. If the deed does not specify the intent of the parties, the ownership will be presumed to be a tenancy in common.

 In a tenancy in common, each owner holds an undivided interest in the property. When one tenant in common passes away, their interest will be inherited by their heirs, not by the other owner. 

Joint Tenancy

On the other hand, if the property is owned by “John Doe and Sam Smith, as joint tenants with the right of survivorship,” the ownership is a Joint Tenancy. In order to create a joint tenancy, the deed must explicitly state that the parties are taking the title as joint tenants. When one owner passes away, the surviving joint tenant immediately becomes the sole owner of the real estate, which is known as “right of survivorship.”

Tenancy by the Entireties

Tenants by the Entireties is established when the property is owned by “John Doe and Jane Doe, husband and wife,” and is a form of ownership that can only be held by a married couple. The deed must specifically state that the purchasers are husband and wife or that they are taking the title as tenants by the entireties. 

A legal “fiction” is established where the two individuals are viewed as a single entity. There is a right of survivorship similar to a joint tenancy, meaning that upon the death of one spouse, the surviving spouse becomes the sole owner of the entire property.

Understanding Easements

An easement is a legal right to use someone else’s land for a specific purpose. It doesn’t take away the owner’s rights to their own land but restricts their ownership by giving someone else certain rights of use to their land. 

Easements can be created by granting someone the right to use the land or by reserving that right for yourself when transferring the property to another person. There are two main types of easements: “in gross” and “appurtenant.” 

• An in-gross easement is a personal right to use the land granted to a specific person and cannot be transferred to others. 
• An appurtenant easement is tied to the land and continues to be effective for all future owners unless it expires or is explicitly released.

Driveway/Road Easements and Water Well Agreements

Easements for the use of roads or other matters occasionally need to be prepared. In rural areas, shared road maintenance agreements and water well agreements become necessary to address the issue of shared expenses among multiple parties. In some cases, two homes in a subdivision share a driveway, which also requires an agreement regarding usage and maintenance. Additionally, issues sometimes occur concerning buildings or fences encroaching on a neighboring property which require agreements prepared between neighbors.