What is the difference between a quit claim deed and a warranty deed?
What is the difference between a Quit Claim Deed and Warranty Deed?
by Martyn Verster, Esq. [email protected]
A quit-claim deed (QCD) is an instrument used by a grantor to relinquish the grantor’s interest in real estate in favor of a specified grantee. The QCD is an instrument that does not come with any warranties of title, and should the grantor not possess title in the property attempting to be conveyed, or should there be a cloud on title, then the grantee acquires either nothing or grantee acquires the property subject to the cloud on title. In any event, grantee will have no recourse against the grantor under the QCD. For the reasons stated, the QCD is an instrument best used to deed oneself out of the title to property or as a curative instrument to clear a title defect, but not an instrument by which a grantee should acquire title to real property.
The proper instrument to convey title to real property is a warranty deed; this is the document that conveys grantor’s interest in the property in favor of a specified grantee, and the conveyance comes with warranty of title. The conveyance of title by warranty deed is insurable, and grantee has full recourse against the grantor. Moreover, if the grantor has an owner’s title insurance policy, the grantor will be insured against any future claim that grantor did not convey marketable title to the grantee.
Important limitations and problems with quit-claim deeds: the conveyance by QCD is not insurable as part of a closing transaction. Additionally, a grantor of property who conveys the property via QCD loses the benefit of any Owner’s Title insurance that the grantor may possess. By way of example, if the grantor conveys real property to her son via a QCD, any prior liens, encumbrances and other clouds on title would no longer be insured.
Because of the foregoing, The Closing Company, Inc. recommends that most conveyances be made by warranty deed. The warranty deed is a more complex document to prepare correctly, and accordingly, TCC has all warranty deeds reviewed by our attorney, and an additional charge for attorney fees is made for the preparation of a warranty deed.
Please feel free to ask further questions to determine whether the conveyance of property by way of warranty deed is of added benefit to you as grantor and/or grantee. Please call us at 305-271-0100 or [email protected]
Frequently asked questions and answers about Florida Quit Claim Deeds
What is a Quit Claim Deed? An instrument of conveyance commonly known as a “title transfer” of real property that passes any title, claim, or interest that the grantor has in the premises but does not make any representations or guarantee the validity of such title.
Is a “Quit Claim Deed” different from a “Quick Claim Deed”? A quick claim does not exists! It is a misnomer. Over the years, people started identifying a quit claim deed as a “quick claim deed” most likely because it is actually a fast way to transfer title. Quick claim deed is not an actual word- but we understand how it began to be used!
Who will need to sign the Quit Claim Deed? The only person(s) that need to sign the Quit Claim Deed are the people getting off title. However, scenarios can vary.
Do the new owners receiving title need to sign the Quit Claim Deed? No, they do not. However, the new owners do need to be available to sign a Document Disclaimer for our records to acknowledge the document.
Will my property taxes go up? Possibly. We don’t make any representations about property taxes. Please consult the property tax appraiser in your county for more information prior to transferring title.
Does a Quit Claim Deed provide any guarantees or assurances? No, it does not. A title search will not be done. A Quit Claim Deed only says to the new owner that if the signer has any interest in the property being transferred, they pass their interest to the owner. Only a Warranty Deed or title insured transaction provides assurance of ownership.
What about any open mortgages on the property? We don’t research for any existing mortgages, since a Quit Claim Deed is being requested. The Borrower needs to contact their lending institution regarding open mortgages.
How will I know if the property has any liens, judgments, survey issues or other problems? You won’t know. We won’t be conducting a title search or providing title insurance to verify ownership and using only the information the person ordering the document is providing, you won’t know anything about the title condition or if any title defects exist.
How do I know if taxes are paid before I take title? You need to check the tax records of the municipality before taking title if that is a concern. We do not verify taxes.
Do I need notify the Condominium Association or Homeowner Association about the transfer? Yes, you will need to contact them in advance and ask how this process works for the new owner. We do not provide assistance with this.
How will I know if any Condominium/Homeowner association fees are past due before I take title? You will need to contact the Condo/HOA Association and request that information directly from them.
Does the document need to be notarized? Yes, it will need to be notarized by U.S. Notary and witnessed by two people (one of the two witness can be the notary). If you are outside of the USA, you will need to visit a USA embassy or consulate.
What are the tax implications of a Quit Claim Deed? Both the old and new owners need to consult with a tax advisor or CPA before taking title. We do not provide tax or legal advice on the execution of this document.
Please contact 305-271-0100 or [email protected] for more information.
Disclaimer: The Closing Company, Inc. is not a law firm and is not providing legal or tax advice in this post. For legal advice, please consult with a licensed Attorney. For tax advice, consult with a Certified Public Accountant. Hiring an attorney is an important decision which should not be based solely on advertising. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship.
