Deed of Release

Overview

A Deed of Release is an important legal document in real estate transactions. It signifies that a party who previously had some claim or interest in a property (like a mortgagee or lienholder) relinquishes those rights, allowing the property owner to hold clear title. Typically, a Deed of Release comes into play when obligations such as a mortgage loan have been satisfied, either completely or partially, facilitating property sales or transfers without encumbrances.

Examples

Example 1:
Morgan holds the mortgage on Fillmore’s land. Fillmore wishes to sell part of the land. In return for Fillmore paying down the mortgage loan by an agreed amount, Morgan gives Fillmore a Deed of Release to the part to be sold so that Fillmore can transfer clear title to the buyer.

Example 2:
Sandra has a lien on Jack’s property due to a previous loan. Jack wants to refinance his home, and to do this, he needs to clear Sandra’s lien. Upon receiving the full repayment of the loan from Jack, Sandra issues a Deed of Release, thereby removing her claim and allowing Jack to proceed with the refinancing.

Frequently Asked Questions

What is the purpose of a Deed of Release?

A Deed of Release formally removes the specific rights or claims of a mortgagee or lienholder, thereby making the title of the property clear and facilitating its sale or transfer.

How is a Deed of Release different from a Quitclaim Deed?

While both documents are used to transfer property interests, a Quitclaim Deed transfers whatever interest the grantor has in the property without warranties, while a Deed of Release signifies the relinquishment of specific rights by a party such as a mortgagee or lienholder.

Who typically issues a Deed of Release?

A Deed of Release is usually issued by the party holding an interest or lien in the property, such as the mortgagee or lienholder, after the associated debt or obligation has been satisfied.

Can a Deed of Release be used for partial satisfaction of a mortgage?

Yes, a Deed of Release can be issued for partial satisfaction of a mortgage, enabling the release of certain parts of the property from the mortgage lien while maintaining the lien on the remaining sections.

Is a Deed of Release required to be notarized?

Yes, like most real estate documents, a Deed of Release typically needs to be notarized to be legally effective and recorded with the appropriate county records office.

Mortgagee: A lender in a mortgage agreement.
Lienholder: An entity with a legal claim on a property as security for a debt.
Quitclaim Deed: A legal document transferring interest in real property with no warranties against claims.
Clear Title: Ownership of property free from any liens, disputes, or other legal issues.
Encumbrance: A claim or liability attached to a property.

Online Resources

References

“Real Estate Law,” Jesse Dukeminier, James E. Krier.
“The Law of Real Estate Financing,” Ted J. Fink, Beth A. Ioppo.
“Property: Principles and Policies,” Thomas W. Merrill, Henry E. Smith.

Real Estate Basics: Deed of Release Fundamentals Quiz

### What is a Deed of Release? - [x] A document where one who has limited rights to a piece of real estate abandons those rights back to the owner. - [ ] A form to apply for a mortgage. - [ ] A tax declaration form. - [ ] An inspection report for properties. > **Explanation:** A Deed of Release is a document where someone with specific rights to a property, like a mortgagee or lienholder, officially abandons their rights, clearing any claims they had on the property. ### Who typically issues a Deed of Release? - [ ] The new owner of the property. - [ ] The real estate agent. - [x] The mortgagee or lienholder. - [ ] The county recorder's office. > **Explanation:** The mortgagee or lienholder is the party that tends to issue a Deed of Release once the debt or lien associated with the property has been satisfied. ### What does a Deed of Release ensure for the property owner? - [ ] Higher property taxes. - [ ] Easier access to refinancing options. - [x] Clear title to the property. - [ ] Lower utility costs. > **Explanation:** A Deed of Release ensures that the owner has clear title to the property, free of the previous creditor's claims or liens. ### In which scenario is a Deed of Release necessary? - [x] When a mortgage debt has been paid off. - [ ] When applying for a new mortgage. - [ ] When contesting property tax. - [ ] When performing a home inspection. > **Explanation:** A Deed of Release is necessary when a mortgage debt or an obligation tied to the property has been paid off, ensuring that the mortgagee or lienholder relinquishes their claims. ### How does a Deed of Release benefit the buyer in a property sale? - [ ] It lowers the purchase price. - [x] It ensures the property has a clear title. - [ ] It speeds up the sales process. - [ ] It guarantees future property value increases. > **Explanation:** A Deed of Release benefits the buyer by ensuring they receive a property with a clear title, free of prior claims or encumbrances. ### When is a quitclaim deed typically used? - [x] To transfer whatever interest the grantor has in the property without warranties. - [ ] Only when selling commercial properties. - [ ] When the property is vacant land. - [ ] In state-sanctioned property disputes. > **Explanation:** A quitclaim deed is typically used to transfer whatever interest the grantor has in a property without any warranties regarding the title. ### Is notarization typically required for a Deed of Release? - [x] Yes, to make it legally effective. - [ ] No, it can be done informally. - [ ] Only for properties worth more than $100,000. - [ ] It depends on the state. > **Explanation:** To ensure a Deed of Release is legally effective and recordable, it typically needs to be notarized. ### What term is used to describe ownership of property free from any liens or disputes? - [ ] Encumbered Title - [ ] Liened Title - [x] Clear Title - [ ] Debtor Title > **Explanation:** Clear Title describes ownership of a property free from any liens, claims, or disputes. ### Why is a Deed of Release critical in refinancing a property? - [ ] It lowers the interest rate. - [x] It clears prior liens, allowing refinancing without hurdles. - [ ] It always reduces the loan amount. - [ ] It guarantees appraisal values. > **Explanation:** A Deed of Release clears prior liens or claims on the property, which is essential for smooth refinancing processes. ### Can a Deed of Release be issued for a portion of the property? - [x] Yes, for partial satisfaction of mortgage. - [ ] No, it must cover the entire property. - [ ] Only if specified in the original mortgage contract. - [ ] Only under foreclosure conditions. > **Explanation:** A Deed of Release can be issued for a portion of the property if the mortgagee agrees, often in return for a payment that partially satisfies the original mortgage.