Transferring Property? A Brief Primer on Deeds
When you’re transferring ownership of a property you own (in this context, you are the “grantor” and the recipient is the “grantee”) to another person, you are either providing a “quitclaim deed” or a “warranty deed.” A quitclaim says you are giving up all your claims to title, while the latter is an affirmation that you are giving the other person a clean title (if you did not have clean title to give in the first place, a lawsuit will likely follow). More specifically:
- The Quitclaim Deed: The quitclaim deed conveys their present interest in the property, if any, in a given parcel of real property to a grantee without representing, covenanting, or warranting that the title is actually good.
EXAMPLE: Arnold has occupied a single acre of Paul’s 10 acre lot, setting up a tent and making it clear he believes he owns that 1 acre of Paul’s land. In legal jargon, his occupancy is continuous, hostile and adverse to Paul’s ownership of that acre, open, exclusive, and continuous for the statutory period of years. Skipping some procedural stuff, let’s say Paul is selling all 10 acres to Ben. Provided Paul signs a quitclaim deed, then there is no real issue; Ben receives 9 acres and Arnold likely has ownership of the other 1 acre.
- Warranty Deed: In contrast to the quitclaim deed, the warranty deed guarantees that the grantor holds clear title to a parcel of real estate, and has a right to sell it to the grantee.
EXAMPLE: Same facts as above, except Paul signs a warranty deed for all 10 acres. Ben likely has a claim against Paul, since Paul did not have clear title to the entire property, and therefore did not have the right to sell it; Arnold likely owns 1 of the 10 acres through adverse possession.
NOTE: acquiring property through adverse possession is not as simple as we are making it sound, but it is a legal doctrine dating back to English law. In a nutshell, a landowner would have to know of the trespasser (that’s what Arnold is until he gains an ownership interest) if he were using the property at all. Property law, at least in the beginning, was interested with the efficient use of land (think John Locke’s labor theory of property); thus, if someone else was making use of the land, while the rightful owner ignored that part of the land, then the law prefers the person who is using it to have ownership.
Nearly all bargained-for-exchanges, involving real property, utilize the warranty deed; it provides a legal safeguard to the person who receives less than what they agreed to. Conversely, quitclaim deeds are typically used where no money is changing hands (say a transfer to a family member); a quitclaim deed would be fine if both parties were aware that the grantor had absolute ownership of the property at issue as well.
At the Chernov Team we understand that knowledge is power, and knowledge of the various methods of transferring ownership of real property is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with the most, and the Chernov Team always leaves the table with the most.