You Want to Quit Claim What?  How Being a Quitter can Hurt...

Hi All in the Blogosphere!  Good to be with you.  As some of you may know, I am a once-a-week law professor at DePaul University College of Law, where as an adjunct, I teach real estate drafting.  Today from one of my students, I got some questions about quit claim deeds in real estate.  It got me to thinking... what does the "average person" know about quit claims?  Not that much it turns out.  So, in my style of styles, I decided to pop in for a quickie-post, and to say a thing or two about Quit-Claim Deeds.  They are not that great for all involved.

First, a quick history lesson:  Back in the old days, when the kings or knights would bestow a land grant upon a lesser serf, they would transfer a "clod" of dirt and say some special words to transfer the land.  As Roman law became more the norm and it became accepted practice to draft documents, it was decided by someone (probably some kind of medieval lawyer of sorts) that there should be a uniform way of recording these types of transactions.  Gone was the dirt, and in came the deed, shiny and new and pleasantly uniform for all the kings, knights and lesser beings to have and to hold.  As time went on, there was a need to differentiate between the kinds of promises that one would be granting with the conveyance, so different kinds of deeds were born.  

Without going into every kind of deed, let it be simply said that a "warranty deed" carries with it a full warranty that the owner has good title and that he absolutely owned the property free and clear of all claims and had the authority to convey it.  The opposite of a warranty deed became known as a "quit claim" deed, which by its  nature carries no warranty of anything and does not protect the  buyer if there is at title claim - like a warranty deed would.  A quit claim deed transfers only what the transferor/seller has, and that may not be much.  

True for all deeds, in order to be truly effective, they need to be recorded in the county or parish or government sector where the real estate is located, so that there is a written record to all who look as to who (or what) claims ownership or any interest.   When banks began to make loans way back in the dark ages, the interest became known as a lien and the lien-holders can use their interest to force a sale of the real estate to protect their positions.  

If a person owns property and has purchased through a title company, then likely they have been issued a warranty deed or a special warranty deed.  If someone acquires property in a private transaction without recordation or title company involvement, then they may have received a quit-claim deed.  What differentiates these transactions is that with a warranty deed there is full assurances and legal requirement of the person giving the deed that they fully own their interest and can dispose of it.  In a quit-claim situation, there is no such promise.  That is, you get "whatever they have to give, which may not be much". 

So what does that mean?  I say!  I say!  My advice to all who read this:  Beware of quit claim deeds.  They are to be used only for transactions where you KNOW the person from whom you are getting the property.  I would not recommend ever dealing with a third party whom  you do not know personally, intimately, or at least have done business with before.  Why?  Because if someone wants to do a quit claim deed, then chances are they do not want to offer title insurance, they do not want to go through the proper lawyer or title company closing requirements, and they do not want to pay for the legitimate closing services that are usually performed in a legitimate situation.  No warranty can mean big fraud.  Now, I'm not saying that every Aunt Sally who deeded to her grandkids was bad.  I am saying that Aunt Sally isn't doing anyone any favors by giving a quit claim without a proper closing and assurances to her kids that she has the authority to do it and that her house is not subject to some other claims she didn't want to tell you about.  That's all.  Just because they be family, don't mean they are nice!  Eh?

What is the bottom line, news you can use?  For all legitimate closing transactions for the conveyance, purchase or sale of real estate, you should be going through a title company.  Hire a lawyer to look things over.  Do it right, on the level and be sure you are protected... on either side of the dividing line.  Getting a quit claim can mean that you got nothin!  And we all know that getting nothing just ain't fair sometimes!

Have a great day!  Enjoy the springtime!