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Although not legally require to make the transfer effective, deeds are routinely recorded with the local government office responsible for recording real estate transactions.A recorded deed gives the public notice regarding property rights in a particular parcel of real estate, such as ownership, easements and liens.
Recording a deed can also protect a property owner against future claims that his property rights are invalid.
A grant deed is used to transfer real estate ownership from one person to another.
The second party is the lender, such as a bank or other financial institution, providing the funds to the borrower.
To secure repayment of the loan, the borrower signs a deed of trust which transfers legal title to his real estate to a third party, called the trustee, who can be any individual or company that does not have any interest in the loan or real estate.
When the document is properly recorded in the county, a lien is then placed on the property and is used as collateral for securing for the loan.
There are generally three parties to a deed of trust assignment of rents contract: trustor, trustee and beneficiary. The borrower has the traditional rights and privileges traditionally associated with the ownership of rental property, including collection of the rents. However, unlike a mortgage, the trustor does not take legal title to the property under the deed of trust.Deed of trust with assignment of rent gives the lender the right to automatically start collecting rent generated by property if the borrower defaults on the loan payments.Another important element of the trust deed is that it names the trustee who takes legal title to the property.Property rights in real estate are valuable and invariably the subject of a legal document called a deed.To transfer ownership rights in real estate, a grant deed is commonly used.Loans that are secured by a deed of trust often include repayment terms that extend for several years or more.From a lender’s perspective, a loan secured by a deed of trust is a fairly safe investment when the value of the real estate is sufficient to repay the loan in the event of a borrower's default.The deed of trust contains the legal description of the property and the terms of the loan, such as the interest rate, loan amount and term.It also identifies the borrower and lender, as well as the legal provisions that explain the rights and responsibilities of each party to the agreement, including trustor obligations, beneficiary rights and trustee duties.Joe Stone is a freelance writer in California who has been writing professionally since 2005. Stone received his law degree from Southwestern University School of Law and a Bachelor of Arts in philosophy from California State University, Los Angeles.A deed of trust with assignment of rents is the legal document typically used in many states for the purchase of rental property.