Choosing between a quitclaim deed and a grant deed is a crucial decision with significant legal implications, particularly concerning real estate transactions. Both transfer ownership of property, but they differ dramatically in the level of guarantee and liability they offer the buyer. This article will clarify the distinctions between these two types of deeds, helping you make an informed choice for your specific situation.
What is a Quitclaim Deed?
A quitclaim deed is a legal instrument that transfers whatever interest a grantor (the person giving up ownership) has in a property to a grantee (the person receiving ownership). Critically, it does not guarantee clear or unencumbered title. The grantor simply releases any claim they might have to the property; they don't warrant its ownership or freedom from liens or other encumbrances. Think of it as saying, "Whatever interest I have, I give to you." This could be full ownership, a partial interest, or nothing at all.
In short: A quitclaim deed offers no warranties. The buyer assumes all risks associated with the property's title.
When is a Quitclaim Deed Used?
Quitclaim deeds are typically used in situations where:
- A simple transfer of ownership is needed amongst family members: For example, transferring property between spouses or siblings.
- Clearing up title issues: If there are minor discrepancies in the title, a quitclaim deed can help to resolve them.
- Removing a lien or claim: If someone has a lien on the property and releases it, they may use a quitclaim deed.
- Transferring property after a divorce: A quitclaim deed can be used to transfer ownership of jointly-owned property after a divorce settlement.
What is a Grant Deed?
A grant deed is a more common type of deed used in real estate transactions. It also transfers ownership of a property, but unlike a quitclaim deed, it includes implied warranties. These warranties assure the grantee that the grantor has the right to convey the property and that the property is free from undisclosed encumbrances (except those specifically listed in the deed). The grantor is essentially guaranteeing that they own the property and have the legal right to transfer it.
In short: A grant deed offers implied warranties of title. However, it doesn't offer the same level of guarantee as a warranty deed, which includes explicit promises.
When is a Grant Deed Used?
Grant deeds are generally preferred in most real estate transactions because of the implied warranties they offer:
- Sales of property: This is the most common use for a grant deed, providing a degree of protection for the buyer.
- Transfers between parties not closely related: Using a grant deed provides a more secure transfer than a quitclaim deed in situations involving non-family members.
Quitclaim Deed vs. Grant Deed: A Side-by-Side Comparison
| Feature | Quitclaim Deed | Grant Deed |
|---|---|---|
| Warranties | None | Implied warranties of title (ownership and freedom from undisclosed encumbrances) |
| Risk | High (buyer assumes all risks) | Lower (buyer has some implied protection) |
| Common Usage | Family transfers, clearing title issues | Property sales, transfers between unrelated parties |
| Liability | Grantor assumes no liability for title defects | Grantor assumes some liability for title defects |
| Cost | Typically less expensive than a grant deed | Typically more expensive than a quitclaim deed |
What are the implied warranties in a grant deed?
The implied warranties in a grant deed typically include:
- Seisin: The grantor possesses the legal right to convey (transfer) the property.
- Right to Convey: The grantor has the legal authority to transfer the property.
- Against Encumbrances: The property is free from undisclosed encumbrances (liens, mortgages, easements, etc.), except those specifically listed in the deed.
Should I use a quitclaim deed or a grant deed?
The choice between a quitclaim deed and a grant deed depends largely on the specific circumstances of the transaction and the level of risk both parties are willing to assume. If you are purchasing property, a grant deed provides significantly more protection than a quitclaim deed. If you are unsure, it's crucial to seek legal advice from a qualified real estate attorney to determine the most appropriate deed for your situation.
Disclaimer: This information is for educational purposes only and does not constitute legal advice. Consult with a qualified legal professional for advice tailored to your specific situation.
