What is Reconveyance?

Reconveyance refers specifically to the process of transferring title back to the prior owner. This typically occurs after a borrower has paid off a loan secured by a property, often in the context of a mortgage or deed of trust. When the borrower fulfills their loan obligation, the lender must execute a reconveyance deed, which officially releases the lien on the property and returns full ownership rights to the borrower. This concept is crucial for understanding property rights and the clearing of liens in real estate transactions.

In contrast, the other options describe different processes that do not accurately reflect the definition of reconveyance. The transfer of title to a new owner pertains to selling a property, which is distinct from reconveyance. A method of property appraisal relates to valuing a property rather than conveying ownership. Finally, transferring title in exchange for payment typically describes a sale or transfer of property ownership under a purchase agreement, not reconveyance. Thus, understanding reconveyance is critical as it emphasizes the importance of returning property rights to the original owner after financial obligations have been met.