A deed of release is a document signed and executed by the trustee or beneficiary of a specified property or interest, indicating a satisfaction of indebtedness. This can involve real property, a contract or a binding legal document.
In the case of real property, it indicates that the property that was being held in trust due to the debt obligation can now be released. When individuals purchase their home, they often engage a financial institution to establish a mortgage for the purchase of the property. For collateral, the financial institution takes on a legal claim for the property, until the loan is satisfied.
When a lien or mortgage is put on a property, either a deed of trust or a mortgage is assigned the property. This gives the lender or trustee limited rights to the real estate. When the lien is paid in full, the lender or lienholder surrenders those rights back to the owner.
When the obligation is remedied, a formal release of a deed of trust or a release of the lien on the property is recorded. A deed of release indicates the property deed and title have been relinquished back to the owner. In many cases, this will be accomplished in the form of a quitclaim deed.
Another example of a deed of release would be if a borrower wanted to sell a portion of his or her property and pay down the mortgage with the profits. The lienholder or trustee would give the borrower a release deed for the particular part of the property he or she wanted to sell. In this way, the property could be sold with a clear title to the new buyer.
This type of deed can also target a dispute being resolved or prevent one from arising. This usually is a promise by one party, not make any future claims as a result of payment or specific actions taken by another party. This can also be applied to a situation being “settled out of court.” In those instances, the deed of release would be drafted indicating the details of the settlement.
Provisions generally include a description of what actions each party involved must take, the terms of the release, a freedom from admission of liability, and a specific barring of any future legal proceedings. A deed of release document usually includes typical boilerplate clauses to satisfy any agreed upon concerns.
