Deed of Release

A deed of release is a legal document that removes a prior claim or lien on an asset and documents that parties are released from certain obligations. It is most commonly used when a mortgage is paid in full—releasing the lender’s claim on a property—but it also appears in employment separations, personal-guarantee releases, and other contexts where a party’s contractual rights or liabilities are surrendered.

Key takeaways

• A deed of release records that an obligation (for example, a mortgage or personal guarantee) has been satisfied and that the releasing party no longer has a claim.
• In real estate, it clears the lender’s lien and establishes the homeowner’s full title to the property.
• Deeds of release can be used in employment settlements to document severance terms, confidentiality, and non‑compete or non‑solicit restraints.
• These documents must comply with state law and should be recorded with the same agency that recorded the original lien.

How deeds of release work

1. Obligation satisfied: The underlying debt or obligation is paid or otherwise resolved.
2. Drafting: Legal counsel for the creditor typically prepares the deed, stating the debt is paid and the lien is removed.
3. Execution: The releasing party signs the deed.
4. Recording: The deed should be recorded with the same land-records office or agency that recorded the original mortgage or lien so public records reflect the release.
5. Effect: The obligor holds the asset free and clear and the creditor’s legal claim ends.

Common types and uses

• Mortgage reconveyance: When a mortgage is paid off, the lender issues a mortgage deed of release (also called a deed of reconveyance or satisfaction of mortgage) to remove the lien and return full title to the owner.
• Employment releases: Employers and departing employees use deeds of release to finalize severance payments and to document release of claims and any continuing obligations (confidentiality, non‑compete clauses).
• Personal-guarantee releases: A deed of release can terminate a personal guarantee for a business loan, with or without full repayment of the underlying loan.
• Other secured transactions: Similar release documents apply to UCC liens and other security interests; different legal rules may apply.

Practical tips and special considerations

• Record the release with the same office that recorded the original lien to ensure the lien is publicly removed.
• Confirm the deed conforms to your state’s legal requirements; sample forms may be available online but often need tailoring.
• If a lender failed and you don’t receive a release, contact the relevant regulator (for failed banks in the U.S., the FDIC) to resolve the matter.
• Review employment releases carefully before signing; they can include ongoing restraints or confidentiality obligations.
• Consider obtaining legal advice when negotiating or accepting a deed of release, especially for complex liens or personal guarantees.

Quick FAQs

Q: Is a deed of release proof of ownership?
A: Yes — after a mortgage is paid and the lender issues a deed of release, the document shows the lender no longer has an interest and the owner holds full title.

Q: Do I need to request a deed of release if I pay off my mortgage early?
A: Generally no. Lenders are required to issue the release once the mortgage is paid in full, but you should verify it’s recorded.

Q: What other names does a deed of release go by?
A: Deed of reconveyance, full reconveyance, satisfaction of mortgage, or lien release.

Bottom line

A deed of release is the legal record that an obligation has been satisfied and any associated lien removed. For homeowners, it proves the mortgage is paid and the title is clear; in employment and lending contexts, it memorializes settlement terms and the termination of certain liabilities. Record the document properly and confirm it complies with applicable law.