What’s In A Name? The Truth About Quitclaims or QuitClaim Deeds
As a law student I was blessed to get a part time summer job shadowing the old law clerks who helped manage the dockets of the judges and document the outcome of cases being tried. Most of my Clerk Mentors (tormenters?) were retired military and were probably hired as backups to the armed bailiffs to help keep the peace. But among the most important things I learned were the dry wit among the Clerks and their astute sense of when to use it and when to maintain decorum. The Clerks had their own lexicon of words commonly butchered by non-lawyer litigants. For obvious reasons, one word assassination they never repeated the presence of the judges was calling the Circuit Court the Circus Court.
Among my favorite examples of misconceived words, and one which has stood the test of time, is the use of the “QuickClaim Deed”. Save yourself a little embarrassment in erudite circles and use the word QuitClaim rather than QuickClaim.
Now that you are ready to use the correct word, what is it?
The Quitclaim Deed is the one that a shyster would give you if you bought the Brooklyn Bridge from him.
QuitClaim deeds among friends are fine. But don’t accept one without understanding what you are getting . . . or not getting.
We basically have 3 major groups of title warranties that are built into 95% of all deed in Virginia. The best deed is a “general warranty” deed. By English common law and state statutes, the meaning of General Warranty has been clearly established. It is a cluster of promises that are inherent in the deed from the seller to the buyer: e.g., I’m (we’re) the best and only owner of the property; (2) We have good title; (3) you will have a quiet and peaceable title when you accept our deed; (4) we’ll come back and help you defend title in the future if someone challenges it, etc. etc.. Some pretty significant warranties! Most standard real estate contracts require a General Warranty Deed and a good settlement agent will make sure you get one if you are entitled by contract to it.
The 2nd best title is by “special warranty”. By comparison to “general warranty”, it stinks. This is the type of deed which you should fairly expect from a bank if they foreclose on a property and resell it. They really don’t know if a neighbor has worn a path through the yard and created an easement or put up a fence to encroach on your property or if the previous occupants of the house hired and then stiffed a contractor who is about to file a mechanic’s lien against the property. So the “Special Warranty” basically says . . . whatever we got, and for the short time we’ve had it, that is what we are passing on. Caveat Emptor baby! Do your own title research. And most banks that sell their REO (real estate owned) inventory won’t give you a Title Affidavit with much breadth or conviction. But at least the title insurance industry will insure such “Special Warranty Deeds” to one degree or another.
The 3rd category and worst quality of all is the QuitClaim Deed. Every seller in America would love to give a Quitclaim every time they sell real estate. Every buyer in America should dread a quitclaim. The QuitClaim says basically: “I’m not saying I really own this property at all, only that I’m signing a deed to you to give you whatever I have.” If you take title by Quitclaim, the buck starts and stops with you. You may still be able to get title insurance to help defray the risks in buying or being given a property with no warranty of title, BUT the title insurance company may refuse to insure your title unless your Sellers agree to also sign a Title Affidavit. No affidavit, no warranty of title in the deed, some title companies will stay clear. When you later sell the property, you will have to warrant title yourself with no one in the chain of title standing behind you to fall back on. Not the end of the world but don’t let it happen to you by chance. Make sure there is a good reason for only getting a QuitClaim. If it’s all you can get, in most cases, its still worth it to get title. Unless there is a toxic waste dump in the back yard, or the property was formerly owned by a drug lord and the government comes to confiscate it after you spend $30,000 to rehabilitate the house, etc.