Which Deed to Real Property Should You Use?
Looney, Smith & Conrad, Deed Attorneys
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed. It is commonly associated with transferring title to property. In the United States, deeds may require witnesses to sign. The deed has a greater presumption of validity and is less rebuttable than an instrument signed by the party to the deed. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds.
Types of Deeds
Quitclaim Deeds (often mis-pronounced “Quick Claim Deeds”) are a simple and inexpensive means of selling or transferring land or solving real estate deeds problems.
“A quitclaim deed conveys any title, interest, or claim of the grantor in the real property, but it does not profess that the title is valid nor does it contain any warranty or covenants of title. Thus, a quitclaim deed does not establish title in the person holding the deed, but merely passes whatever interest the grantor has in the property.” Diversified, Inc. v. Hall, 23 S.W.3d 403 (Tex. App.—Houston [1st Dist.] 2000, pet. denied).
When a person signs a Quitclaim Deed, they surrender whatever rights they have to the property – whatever they are. They essentially walk away and have no responsibility to the purchaser. By comparison, a Warranty Deed, where the seller “grants, sells and conveys the property to the buyer … to have and to hold it … forever, and binds seller and seller’s heirs to warrant and forever defend the property to the buyer,” obligates the Seller to provide clear title to the buyer.
Quitclaim Deeds can be useful in clearing title in limited circumstances, such as when there is a question about whether a particular heir has a claim to the property, or where a person may have acquired title by adverse possession. In most cases, however, it is preferable to use another kind of deed.
In most land sales, the buyer (and the buyer’s lender, if any) expect the seller to convey valid, ‘clean’ title. The seller warrants to the buyer that the seller actually owns the land and has the right to sell it. Such a warranty is called a “warranty of title,” and it is conveyed via a Warranty Deed. There are two kinds of Warranty Deeds: the Special Warranty Deed, and the General Warranty Deed.
Special Warranty Deed
When a seller executes a Special Warranty Deed, the seller warrants only that he has not personally done anything to adversely affect the title being conveyed. For example, if the seller had already sold the property to someone else, had granted someone else an undisclosed option to purchase, or had permitted an undisclosed lien to be placed on the property, the seller would be in breach of the warranty of title.
However, if the title is impaired because someone else forged a prior owner’s signature on a deed, or sold the property in violation of a court order, the seller would not be liable because the seller did not personally cause the title defect. For this reason, a seller may prefer to offer a Special Warranty Deed.
General Warranty Deed
Buyers, however, prefer to have a General Warranty Deed. When a seller makes a general warranty, the seller warrants that not only has the seller not personally done anything to adversely affect the title being conveyed, but neither has anyone else who has ever owned the property. If the buyer’s title is lost or impaired because of a previously unknown defect in the title, the seller will be liable to the buyer for the loss even if the seller had no reason to know of the forgery.
Deed Without Warranty
Texas law recognizes another form of deed which is neither a Quitclaim Deed nor a Warranty Deed, but rather something in between. Like a Warranty Deed, a Deed Without Warranty uses the “grant, sell and convey” language to establish title in the buyer. Like a Quitclaim Deed, though, a Deed Without Warranty makes no warranties or covenants of title, so the seller has no liability for title defects.
A Deed Without Warranty will rarely be appropriate in a sale transaction; however, because it offers greater protection to the buyer without any additional risk to the seller it should be considered as an alternative whenever a Quitclaim Deed might otherwise be used.
Deeds and Title Insurance
Even if the buyer is successful in obtaining a General Warranty Deed, however, the buyer runs the risk that a title problem might arise after the seller has died, moved away, or become insolvent. There is little comfort in having a claim against someone who cannot pay.
A prudent buyer may obtain title insurance from an underwriter. Title insurance provides indemnity against most title defects. If a covered problem arises, the buyer can file on its insurance policy, and the underwriter will either pay the cost to investigate and correct the problem, or compensate the buyer for the loss.
Deed and Title Disputes
When a title dispute arises all parties involved (and their lawyers) will take an interest in the type of deed that was used in the underlying transaction. For answers to questions about this topic, or to speak with an experienced Texas real estate attorney to help ensure the documents in a real estate transaction are properly negotiated and drafted, call the Deed Attorneys at Looney, Smith & Conrad, P.C. today.
For assistance with deeds, contact Looney, Smith & Conrad, P.C. at
281-597-8818 (Houston) 979-826-8484 (Hempstead) 405-388-6191 (Text) or 713-828-7494 (Emergencies).
Our attorneys can answer questions about a home or commercial deed, title deed, grant deed, property deed, land deed, transfer deed, mortgage deed, interspousal transfer deed, deed of assent and deed of reconveyance.
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