Quit using quitclaim deeds. These little gems are the bane of title insurance companies and lawyers everywhere.
Quitclaim Deeds vs Warranty Deeds
A quitclaim deed is a document where the grantor uses words such as “remise, release and forever quitclaim all the right, title and interest” of the grantor to an interest in land. It gives to the grantee only the title held by the grantor, which may be anything or nothing. A quitclaim deed does not even pretend to convey good title to the land. Instead, it officially gives buyers notice that there may be potential additional secret claims on the property.
A general warranty deed, on the other hand, is a wonderful document. It states that the grantor holds title to the land and is conveying that title to the grantee. A general warranty deed uses words such as “grants, and conveys to Grantee the Property, together with all and singular the rights and appurtenances thereto in any way belonging, to have and to hold it to Grantee and Grantee’s heirs, successors, and assigns forever.” There is more language, but you get the gist.
See the difference? A quitclaim deed says, “I don’t know what I have, but whatever it is that I have I am giving to you.” A general warranty deed says, “I own this and I am giving it to you.”
The Texas Supreme Court sounded the alarm over quitclaim deeds in the 19th century, noting that where the grantor conveys only his title, the presumption is that he has doubts as to his right to the land. That gives the purchaser “notice sufficient to put him on inquiry as to the claim which casts the doubt upon the title.”
In other words, anyone who purchases land that has a quitclaim deed in its title history deserves what he gets.
A quitclaim deed is not innocuous. Once a quitclaim shows up on the deed records, it taints the property forever. As noted on the Statement of Intent on SB 885 from the 87th Texas Legislative session: “In Texas, quitclaims negatively impact the chain of title in perpetuity.”
SB 885, which passed and became law effective September 1, 2021, attempted to limit the cloud caused by a quitclaim deed by imposing a statute of limitations. Whether or not that works remains to be seen.
Why Do People Still Use Quitclaim Deeds?
If quitclaim deeds have been a known hazard for the last 150 years, why are people still using them? There appear to be three reasons.
First, it’s easy. Anyone can download a quitclaim deed form off the internet. Why pay an attorney to give you advice about a document when you can get it for free?
Second, there is no magic language to create a quitclaim deed, and there is a trend by some courts to interpret language in deeds as conveying merely a quitclaim interest. Documents that would at one time be accepted as warranty deeds are suddenly thrown into the quitclaim cesspool. The cases are not necessarily consistent with each other, so confusion abounds.
Third, some heirs and distributees of estates think a quitclaim deed is the proper way for them to disclaim any interest they may have in inherited land. The name alone leads people to believe that a quitclaim deed is a good way to convey their interest in land. They are, after all, quitting their claim to the land.
There may be an appropriate place in the world for quitclaim deeds, but if so, don’t go there without some good legal advice.