One of the most puzzling issues confronting Texas consumers when attempting to document a real estate transfer is deciding which type of transfer deed is appropriate to use. For generations, well-meaning advisors have unknowlingly led their questioners astray by repeating a well-circulated but extremely inaccurate mantra: In order to transfer title to real estate, the seller should give the buyer a quitclaim deed, often mispronounced a quickclaim or quick claim deed. On innumerable occasions, consumers have contacted my office asking for such a document, claiming that the county clerk’s office at the courthouse advised them to utilize this document. And the bad advice is not limited to just the non-attorney public. Many, many divorce lawyers and probate lawyers routinely subject their clients to potential title issues by including quitclaim deeds in their work product. How such misinformation and misuse has become so widespread is a mystery; however, Texas law is very clear that in most instances, a quitclaim deed is not appropriate, and could lead to future problems.
In Texas, there are basically four main types of deeds: a general warranty deed, a special warranty deed, a deed without warranty and a quitclaim deed. The differences between them are profound, and the type used continues to affect both parties well after the transfer takes place.
But back to basics. In order to validly convey title to real estate in Texas, a grantor must execute a deed to the property in front of a notary public. The deed must be presented to and accepted by the grantee, and it should be filed of record in the county clerk’s office to put the public on notice of the transfer. Failure to file the deed can subject the property to future claims by other parties.
Most commonly, a grantor provides a general warranty deed. This basic staple of Texas real estate law serves to transfer title to the grantee, and contains a full warranty of title, whereby the grantor warrants to the grantee that the title to the property is free and clear of any other claims. Obviously, such a deed, containing broad warranties of title, provides the best protecton for the grantee.
However, in certain situations, a grantor may not be comfortable in making such broad warranties to a grantee. Perhaps they are not sure about the status of title prior to their ownership, or they would rather the grantee rely on the title insurance provided by a title company to cover any past title issues. In such cases, a grantor may opt to provide only a special warranty deed. Despite the implications of its name, a special warranty deed is actually more limited than a general warranty deed, in that it warrants that title is free and clear from other claims only during the time period of the grantor’s ownership. A special warranty deed offers no protection for claims arising prior to the grantor’s ownership.
If for whatever reason a grantor is not comfortable making any warranties of title at all, a deed without warranty can be prepared. However, such a document is not advised, and a grantee would accept such a deed only as a last resort. This type of deed is typically used to clear up past title problems, such as recently found heirs in the chain of title who were not even aware of their interest in the property.
Lastly a quitclaim deed is hardly a deed at all, in that technically, it does not convey anything. Instead, it is more of a release than anything else. In executing a quitclaim deed, the signer is in effect releasing, or relinquishing, any claim of title to the transferee. This relinquishment is similar to “stepping aside”; it does not amount to an actual conveyance or transfer of title at all. For this reason, most title companies will not give credence to quitclaim deeds found in a chain of title, and corrective action must be taken before a property sale can be closed.
A person desiring to take title to property is well advised to avoid the oft-recommended “quick-claim” deed, and demand instead an actual warranty deed from the grantor. This, coupled with a title insurance policy issued by a reputable title company who has performed a complete search of the property’s title records, provides a grantee the most security, facilitating many happy years of real estate ownership.
Copyright 2010 Jeffrey A. Rattikin, all rights reserved