Can You Void a Deed After Gifting It?

There are many reasons why someone would want to void a deed after gifting it – one of these reasons might stem from the fact that you once thought you were going to die. However, amidst these uncertainties, situations may arise where the question lingers: Can a property transferred via grant deed be taken back by the grantor?

This blog post delves into the potential possibilities of grant deed revocation, shedding light on the potential valid grounds for to be able to void a deed after gifting it. Understanding the potential for valid revocation empowers both donors and recipients with crucial knowledge about the complexities of legal ownership and the cancellation of grant deeds. So, let us navigate through the legal landscape to uncover the possibilities surrounding the revocation of grant deeds.

Key Takeaways

• Grant deeds are a popular legal instrument for transferring real property.
• A grant deed, like a contract, is binding once signed.
• Rescinding a grant deed may be considered if the grantor made a mistake regarding a basic assumption upon which the contract was based, and the mistake has a material effect on the agreed exchange of performances.
• To rescind a grant deed, the grantor must demonstrate that the enforcement of the deed would be unconscionable under the circumstances.

Can you Void a Deed After Gifting It?

In California, a deed is a document that is used to transfer title in real property. Specifically, a “grant deed” is a form for deed set forth by the California Civil Code § 1092, which sets language for the deed including the specific use of the word “grant “ to differentiate the deed from quitclaim deeds. Grant deeds are the most common form of deeds and is presumed to convey a person’s entire interest in property to another person. (See § 8:5. In general, 3 Cal. Real Est. § 8:5(4th ed.).)

With that background knowledge in grant deeds, what happens a grantor conveys a grant deed to a grantee because the grantor thought they would perish, but actually lived? Can the grantor void the deed as a result?

The answer is not so simple because a grant deed, like a contract, is binding once signed, absent specific conditions. In the hypothetical above, the grantor may attempt to rescind the grant deed because it was conveyed by mistake.

Rescinding a Deed

The California Civil code states that a contract may be rescinded if it “was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party.” (Civ. Code, § 1689(b)(1).)

The California Supreme Court clarifies that “Where the plaintiff has no reason to know of and does not cause the defendant’s unilateral mistake of fact, the defendant must establish the following facts to obtain rescission of the contract:

1. the defendant made a mistake regarding a basic assumption upon which the defendant made the contract;
2. the mistake has a material effect upon the agreed exchange of performances that is adverse to the defendant;
3. the defendant does not bear the risk of the mistake; and
4. the effect of the mistake is such that enforcement of the contract would be unconscionable.

We shall consider each of these requirements below.” (Donovan v. RRL Corp. (2001) 26 Cal.4th 261, 282 [109 Cal.Rptr.2d 807,824, 27 P.3d 702, 716], as modified (Sept. 12, 2001).)

Showing You Made a Mistake

Returning the to the hypothetical, a grantor who mistakenly thought he was going to die can rescind the contract if he can show that: the grant deed was made based on the underlying assumption the grantor was going to die, the mistake is material to the grant deed because the grantor did not die, that the grantor does not bear the risk of the mistake, and the mistake would prove to be unconscionable because the grantor is now living and lost their property as a result of the enforcement of the deed. In that situation, a rescission of the grant deed due to mistake may be possible.