Q: When a trust sells real estate should it issue a trust deed or a warranty deed? Does it make a difference if the sales contract requires one or the other?
A: If it's appropriate, you can do both.
Deeds are some of the most common legal documents that people encounter. They are also some of the most misunderstood.
The first thing to understand is there are essentially two types of deeds: warranty deeds and non-warranty deeds. I suppose that transfer-on-death deeds need to be thrown into the mix but those are a different kind of critter entirely.
The name on the top of the deed is less important than what is in the body of the deed. It's the language in the deed that makes all the difference. The "warranty" in warranty deeds refers to the guarantees that are made regarding title.
When you sign a deed with warrants of title (i.e. a Warranty Deed), you are guaranteeing that you are conveying a good and clean title interest. When you sign a non-warranty deed (i.e. a Quitclaim Deed), you are not making any guarantees. A transfer by quitclaim deed basically says that you aren't guaranteeing that you are transferring clear title but you are transferring whatever title you hold.
Now does that mean that a quitclaim deed doesn't transfer clear title? No. If the grantor has clear title that's what they are conveying. It only means that they aren't making any guarantees.
In your case, the title trustee's deed doesn't tell you anything except the deed is being issued by a trustee. A trustee's deed can contain a warrant of title or not. You can't really tell that from the title on the deed. If the trustee's deed warrants title, it's a warranty deed. If it doesn't warrant title, it's a non-warranty deed. It works the same way, whether it's a corporate deed, an LLC deed or a guardian's deed.
Pay less attention to what the deed is called and more attention to what it says. The really important stuff is in the body of the deed, not the title. Normally it would be in the opening paragraph of the deed. Look for a line that says something to the effect of "the seller hereby grants, bargains, sells conveys and warrants." If the word warrant appears, you likely have a warranty deed. If it is missing, it is likely a non-warranty deed.
Finally, if you are unsure which deed you should provide, take a look at the contract. The deed requirements should be spelled out somewhere in the contract.