Legal Definitions - derivation clause

A derivation clause is a provision in a deed of trust that provides information about the transfer of a property, specifically the source of the title. This includes the name of the previous grantor and the recording date of the deed. A deed is a written instrument that conveys land or property. It can be absolute, meaning it conveys title without condition or encumbrance, or it can be a bargain-and-sale deed, which lacks any guarantee from the seller about the validity of the title.

For example, if John sells his property to Jane, the derivation clause in the deed of trust would state that John was the previous grantor and the recording date of the deed. This information is important for future reference and to ensure that the title is clear and free of any encumbrances.