Deeds are used to transfer and establish ownership of real property. Property transfers occur when you sell property, inherit from a family member or you add another person to the title. A warranty deed comes with a legal guarantee of title ownership on which you can depend. Quitclaim deeds offer quicker title transfer, but come with no guarantees and the risk that a prior claim to the property may come to light at a later date.
Understanding Property Transfer
Although the thought of selling your property may seem like a very complicated process, the basic process is actually not very complex. Every county clerk's office in the country has forms available to complete the transfer. To transfer real property, you need the seller's name, buyer's name, legal description of the property, parcel number, address if it's a house, property tax documentation, documentation of the sale and city or county where the parcel is located. Regardless of your personal legal knowledge, it is always best to consult with an attorney when making a real estate transfer or sale.
When you provide a warranty deed to the buyer, you guarantee that you have clear and unencumbered title to the land being sold. If a claimant comes forward at a later date with a prior claim to the property, you are obligated to pay damages to the buyer. The two types of covenants are express covenants and implied covenants. When an express covenant is given, the seller offers protection against all future claims against the property. When an implied covenant is provided, the seller says he has not made a prior sale of the property and that there are no present encumbrances against the property.
Quitclaim deeds are used to transfer title to property when a guarantee is not required by the buyer. Quitclaim deeds are useful for changing names on an existing deed when the owner is married, divorced or an error in spelling is discovered. Businesses use quitclaim deeds when a business's name is changed. Great caution should be used when you purchase real property with a quitclaim deed because you will have no legal protection against any claims that may arise at a later date.
Liens and Other Encumbrances
Physical encumbrances provide limited rights to other people to use your property. These rights include easements, water rights and full use of your property. Legal encumbrances include financial liens, tax liens and court judgments. If you purchased your property with a quitclaim deed, you have no legal protection from any of these legal actions should they arise at a later date. When you go through the process of acquiring a warranty deed, the title company that researched your deed will provide a guarantee that no undisclosed encumbrances exist on the property.
Kenneth Oster's leadership experience includes an Air Force career, pastoral leadership, and business ownership in the automotive repair industry. He has a MBA from Western Governors University, and is working toward a DBA degree from Northcentral University. Oster authored the book, "The Complete Guide to Preserving Meat, Fish and Game: Step-by-Step Instructions to Freezing, Canning, Curing and Smoking."