A quitclaim deed is widely used due to being quick, efficient and cheap. But in reality, a quitclaim deed is not really a deed.
There are 3 main types of deeds used in the sale of real property in Texas: General Warranty Deed, Special Warranty Deed, and Deed without Warranty. These deeds convey the interests owned by the Seller in the real property being conveyed. There are differences in the 3 deeds with each warranting in different manners. A General Warranty Deed gives the greatest amount of guarantee and warrants that the title has no issues and is free and clear of defects. With a Special Warranty Deed, the Seller only guarantees that the title is clear from the time they acquired the property to the present time. Therefore, the seller guarantees that they did not do anything during the time they’ve owned the property to cloud their title to the property. With a Deed Without Warranty there is no warranty and no contractual promise by the Seller that he or she will stand behind the promised conveyance. However, the Deed Without Warranty uses the words of grant, so it is a Deed regardless of its lack of warranty and transfers the interest described therein.
On the other hand, a quitclaim deed does not convey property and only conveys the Seller’s rights in the property, if there are any. A quitclaim deed also does not contain any warranty of title. Put simply, the buyer is being given a quitclaim deed that claims to transfer some title to property but makes no guarantees about that claim. It is possible a buyer is paying for a quitclaim deed that does not provide title for anything without any recourse against the seller. Because of the lack of conveyance and guarantee, in Texas, title companies are highly unlikely to insure a quitclaim deed. Therefore, title companies often require for another deed to be drafted to replace the quitclaim deed or for a lawsuit to be filed to remove the cloud on the title.
A quitclaim deed should be avoided whenever possible. Call us if you need a deed drafted, a deed reviewed, or further legal advice on quitclaim deeds!