Question about Quit Claim Deed

[longrangepistol]

A quitclaim deed is a legal instrument by which the owner of a piece of real property, called the grantor (seller), transfers his interest to a recipient, called the grantee (buyer). The owner/grantor terminates (“quits&rdquo his right and claim to the property, thereby allowing claim to transfer to the recipient/grantee.

A quitclaim deed contains no title covenant and thus, offers the grantee no warranty as to the status of the property title; the grantee is entitled only to whatever interest the grantor actually possesses at the time the transfer occurs. The grantor does not guarantee that he actually owns the property at the time of the transfer, or if he does own it, that the title is free and clear. It is therefore possible for a grantee to receive no actual interest, and – because a quitclaim deed offers no warranty – have no legal recourse to recover their losses. Further, if the grantor should acquire the property at a later date, the grantee is not entitled to take possession, because the grantee can only receive the interest the grantor held at the time the transfer occurred.

A general warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer). The guarantee is not limited to the time the grantor owned the property—it extends back to the property's origins.

I've had clients purchase land and homes via a QCD in what I refer to as a kitchen table transfer and almost everyone of the transfers had some issue. Even I could give you a QCD to the property you are asking about. The language in a QCD essentially states that "I'm conveying WHATEVER interest I may own" if I own no interest in the property then you received NOTHING.
A great little anecdote about one of these kitchen table transfers with a QCD: individual BUYER buys house (very cheap, $6,000.00), from SELLER pays for house with certified funds, and over the course of five (5) months spends $20,000.00 fixing home up to sell. Home sells, at closing title company finds two tax liens from SELLER. Only way house closes is for BUYER to pay SELLER's tax liens totaling over five figures. Any recourse NO.

If you are paying $5,000 an acre a $1,000 an acre or even $5.00 an acre contact a title company in the county where the property resides, pay for the abstract to be brought up and pay for the title insurance and closing costs. The title company will issue a Warranty Deed for the SELLER to execute and will guarantee title. If the SELLER refuses to do so then walk away. There's a reason some sellers will only issue a QCD and that's because they have liens, judgments and tax issues they would just as soon forget about.

QCD's are generally only used for transferring property in divorce cases. Where one party transfer's their interest from a Joint Tenancy with Right of Survivorship deed (husband / wife) to a Fee Simple Interest (single person).

If you still choose to acquire the property via QCD, then you deserve everything you've bargained for.

LRP

 

[harley128]

Appreciate that info! Thanks

 

[HMFIC]

Further, if the grantor should acquire the property at a later date, the grantee is not entitled to take possession, because the grantee can only receive the interest the grantor held at the time the transfer occurred.

Interesting. What does this mean? Do you have an example?

 

[longrangepistol]

Interesting. What does this mean? Do you have an example?

I give you a QCD dated today January 2, 2012 for property I don't even own but I deed you "whatever interest that I may own today, 1-2-12" which may be NOTHING. On February 1, 2012 I actually purchase the property and am granted a General Warranty Deed and I take possession of the property. I subsequently kick you off the property because you are now trespassing and if you return I contact local authorities and have you arrested.

LRP

 

[Shadowrider]

I give you a QCD dated today January 2, 2012 for property I don't even own but I deed you "whatever interest that I may own today, 1-2-12" which may be NOTHING. On February 1, 2012 I actually purchase the property and am granted a General Warranty Deed and I take possession of the property. I subsequently kick you off the property because you are now trespassing and if you return I contact local authorities and have you arrested.

LRP

Generally this is correct. But it all depends on the language in the deed. Quit claim deeds also are used frequently to clear title to property. Sometimes after acquired title will pass.

 

[1shott]

I passed on some land that the seller wanted to do a QCD on. They had no abstract or title in hand and said if I wanted any of that that I would have to pay for that before the sale at my cost. When asked about other family members having a claim to the land, I was told its possable we cant remember.

I ran away from that as fast as I could.

 

[HMFIC]

If someone is trying to screw you by selling property that thay dont own, then what difference does it make how they convey the title that they have no right to anyway?

Isn't the bottom line is making sure through title research that there is clear title and obtaining title insurance if youre so inclined?

 

[longrangepistol]

But it all depends on the language in the deed. Quit claim deeds also are used frequently to clear title to property. Sometimes after acquired title will pass.

It's what type of deed executed that takes precedence over any language contained within the deed. A Warranty Deed will have the requisite language "warrantying the title and it's passage to the grantee" a Quit Claim Deed will contain language that "quits" whatever interest the Grantor may or may not have to the grantee. If you think you can change the "language" within the instrument to reflect one type of transfer and then style (label) the deed whatever you want to label it then you will end up clouding the title of the property in question. A quiet title action to clear up the title is not a cheap endeavor.

Warranty Deed: Grantor, when transferring the title to you, warrants that he owns the property free and clear of all liens. This is the preferred method used by every title company I've dealt with.

Quit Claim Deed: Grantor, "quits" whatever interest he may have in the property unto the Grantee. A quitclaim deed typically is executed when the property isn't sold -- when the owner dies and bequeaths it to someone, or when the owner gets married and wants to add the spouse's name to the title, or when a former spouse's name is removed as part of a divorce settlement or when the property is transferred to a living trust.




LRP

 

[harley128]

Appreciate all the input guys! I have learned a lot!!

 

[longrangepistol]

When asked about other family members having a claim to the land, I was told its possable we cant remember.

I ran away from that as fast as I could.

Everyone wants to sell "my portion of mama's estate" and a lot of times in the state of their grief/greed they choose to ignore other potential heirs that may own an undivided interest in the property in question. You were wise to pass on the above mentioned deal. My advice to clients has always been the best deal is the one you can walk away from. If you know in your gut or have cause or concern based on information you've gathered there are problems/potential problems then walk away from the deal. If in one's infinite wisdom the vice of greed has taken over then caveat emptor.

LRP