Derivation Clause Law and Legal Definition
Derivation clause is a provision in a deed of trust that gives information about the transfer of a property like the source of the title. It provides details about the name of the previous grantor and the recording date of the deed. In short it provides information about the derivation of title.
The following is an example of a state statute ( South Carolina) on Derivation Clause:
S.C. Code Ann. § 30-5-35. Derivation clause and address of grantee or mortgagee on deeds and mortgages.
(a) All deeds conveying an interest in land and all mortgages of real estate executed after July 1, 1976, must include a derivation clause in the property description and there must be inscribed on the deed or mortgage the mailing address of the grantee or mortgagee. When the grantor's or mortgagor's title was acquired by deed, the derivation clause must include the name of the grantor and the recording date of that deed. However, when the deed of derivation has been simultaneously executed and delivered and has not then been recorded it is sufficient to set forth in the deed or mortgage the name of the grantor of the deed of derivation and its date and that it is to be recorded. When the grantor's or mortgagor's title was obtained by inheritance or devise, the derivation clause must include the name of the person from whom the title was acquired, the approximate date of acquisition, and, in the case of property acquired under a probated will or administered estate, the probate court in which such estate was filed. However, a derivation clause is not required on a deed or mortgage of property devoted to a utility or railroad purpose of any private or public utility or railroad. Further, a derivation clause is not required on a quitclaim or non-warranty deed of real property.
(b) A clerk of court or register of deeds shall not record any deed or mortgage after July 1, 1976, unless it contains a derivation clause as prescribed in subsection (a); provided, however, that he may record a deed or mortgage without such clause upon a showing satisfactory to him that the necessary information for such clause was not available.
(c) The provisions of this section are intended to be regulatory in nature and will not affect the legality, force, effect or record notice of any instrument recorded in violation hereof.