Grant Deed vs Quitclaim Deed

GRANT DEED vs QUITCLAIM DEED: Why a Grant Deed and why a Quitclaim Deed? This is a topic that has been asked time and time again. Both are instruments of conveyance, but why use one and not the other? The answer lies in the warranties (responsibilities) that follow the conveyance.

Using a Grant Deed to transfer ownership implies (or warrants) that:

  1. The person granting the property (Grantor) did not transfer it prior to this conveyance,
  2. The property is transferred free from any liens or encumbrances placed on it by Grantor, unless allowed by person receiving the property (Grantee)
  3. Absolute ownership or “fee” title is conveyed,
  4. Any ownership that come to the Grantor afterwards – “after-acquired” title – is also conveyed.

On the other hand, when using a Quitclaim Deed you will notice right off that in the language of the form, the word “grant” is substituted for the word “quitclaim” or the words “remise, release and quitclaim”. That means that there are no warranties regarding any liens or encumbrances existing on the property, and there is no transfer of any “after-acquired” title. But most importantly, the Quitclaim only transfers whatever present right, title or interest the Transferor may have. It is not an actual conveyance of ownership and it is not concerned with past or future interest.

This is why when we ask a person to sign off whatever community property interest he/she may have in a property that the spouse is purchasing, we ask for a Quitclaim Deed. The spouse cannot warrant (1), (2), (3) or (4) above.

As a further notation, in many REO transactions the REO Lender selling the foreclosed property may use a Quitclaim Deed. The reason behind that also relates to the 4 items. The REO Lender will only transfer whatever rights they have acquired under foreclosure and give no other warranties with respect to what has happened on the property in the past prior to foreclosure. Buyers under such terms should do all their due diligence and get good title insurance.

Please contact your legal and financial counsel for independent advice. Viva Escrow! Inc. does not provide any legal or financial counsel.