WHEN IS A REAL PROPERTY DEED EFFECTIVE IN CALIFORNIA?

William Sweeney

California's "statute of frauds" requires that a deed that transfers title in real property must be in writing. The parties to a grant deed are the grantor, the owner, and the receiver of title, the grantee. With a quitclaim deed the owner transferring the property is commonly called the "quitclaimor."

Many falsely believe only the act of recording a deed transfers title and if not recorded the deed is ineffective. There are times when an effective deed is not recorded. To determine the effective transfer of title by deed one must determine if the deed was "delivered" and "accepted."

A deed does not transfer title to the grantee until it has been legally delivered. "Delivery" is a term of art. First year law students struggle to learn about "delivery" as stemming from the feudal days when lords transferred possession of land by "livery of seisin" by giving a clump of dirt to the grantee. The actual transfer or delivery was necessary to effect the transfer. However, today delivery is dependent on "livery of seisin."

Delivery is a question of intent. A valid delivery of a deed depends upon whether the grantor intended that it should be presently operative. Delivery does not mean the physical act of transmitting the deed to the grantee. Delivery refers to the intention of the grantor that the deed be presently operative and the grantee becoming the legal owner.

Acceptance is a question of intent. California law requires that not only must "delivery" occur the deed must also be accepted, which refers to the grantee's intent. The grantee must have the intention to become the legal owner of the property.

Usually delivery and acceptance do not come up, except in unusual circumstances. Such an unusual case came up when deeds were prepared for a trust that had not been created.

In Luna v Brownell (2010) 185 CA4th 668, the settlor of a trust (the father) prematurely transferred his interest in the home he owned to the trust that he had not yet created. On August 6, 2006, the settlor's children, who owned a 75% interest in the home, executed a deed which conveyed their interest in the home to the trustee of the settlor's forthcoming trust. On August 13, 2006, the settlor executed a deed which transferred his 25% interest to his forthcoming trust. On August 29, 2006, the settlor executed a trust which named himself as trustee. The settlor passed away shortly afterwards on September 19, 2006 and a week after that the children filed suit against his estate.

One of their arguments was that the deed from them to their father's trust was void because the trust was not in existence when the deed was executed. This argument was rejected by both the trial court and the court of appeal because case law from other states held that such transfers are permitted. Those cases held that the transfer is valid between the parties but is void against third-parties. The result was that the deeds executed by the children to their father's trust were valid.

The Court in Luna v Brownell stated in part as follows:

"A deed does not transfer title to the grantee until it has been legally delivered." (3 Miller & Starr, Cal. Real Estate (3d ed. 2000) Deeds, § 8:36, p. 66, fn. omitted; see also Civ.Code, § 1054 .) "Delivery is a question of intent." (Osborn v. Osborn (1954) 42 Cal.2d 358, 363.) "A valid delivery of a deed depends upon whether the grantor intended that it should be presently operative, and a manual transfer is not conclusive evidence of such intention." (Huth v. Katz (1947) 30 Cal.2d 605, 608.) Although physical delivery of a deed raises an inference that the grantor intended to immediately transfer title, that inference may be overcome by evidence showing a contrary intent. (Helm v. Hess (1955) 131 Cal.App.2d 251, 254.) The trier of fact must determine intent by reviewing all of the surrounding circumstances of the transaction. (Perry v. Wallner (1962) 206 Cal.App.2d 218, 221 (Perry ).) "Where there is substantial evidence, or where an inference or presumption may be drawn from the evidence to sustain the court's finding of delivery or nondelivery, the finding will not be disturbed on appeal." (Ibid.)

In addition, acceptance by the grantee is necessary to make a delivery effective and the deed operative. Whether the deed was accepted by the grantee so as to complete a transfer of title to him is likewise a question of fact for the trial court." (Perry, supra, 206 Cal.App.2d at p. 222.)"

If you have a California probate matter or questions regarding a deed transfer of real property and wish to gain more information please contact me. From my office in Southern California, I represent families in all California courts, including Southern California counties, including Imperial County, Los Angeles County, Orange County, San Bernardino County, San Diego County, others spread across the state and interested parties outside California.

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