Tuesday, January 18, 2011

What are Fiduciary Deeds?

Have you ever bought a home or commercial property in any of the following circumstances--where the seller was a decedent's estate, a receivership, a bankruptcy estate?  In each of these situations, the party signing the deed will not be the individual or company that has title to the property but a fiduciary who's been court appointed to handle disposition of the owner's property.  The executor handling the decedent's estate, the receiver in a receivership, or the trustee in a bankruptcy estate are appointed by a court having jurisdiction over the property and typically transfer property using what is called a "fiduciary deed."  

Absent from fiduciary deed are the typical warranties as to title that would be included in a general warranty deed or limited warranty deed.  What is included instead is a reference that the property is granted "with fiduciary covenants" with a reference to the case number for the legal proceeding covering the property sale and the appointment of the grantor to act as a fiduciary.

Section 5302.10 of the Ohio Revised Code provides that in a conveyance of real estate, or any interest therein, the words "fiduciary covenants" means the grantor covenants with the grantee and grantee's heirs, assigns and successors, that the grantor is duly appointed, qualified and acting in the fiduciary capacity described in the deed, is duly authorized to make the sale and conveyance of the property, and that in all of grantor's proceedings in the sale of the property that is described in the deed, the grantor has complied with the requirements of the statutes of such court proceeding.

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