Monday, February 18, 2008

query: if I have title insurance is it okay to buy a home with a quit claim deed

Attorneys do argue whether or not a quit claim deed IS a deed of conveyance at all. The language of a quit claim deed generally would not contain the words "grant" or "convey" which are the operative words in the transfer of real estate. A quit claim deed is more about quitting or releasing rights to another party and is more appropriately used when the party receiving the rights already has ownership and is simply acquiring missing pieces or tying up loose ends.

A warranty deed on the other hand, whether general or special, clearly conveys ownership and includes some promise of defense of title by the seller. This warranty given by the seller shouldn't be pooh poohed as it may cover some things your title insurance does not cover. So, buying real estate with title insurance but without a warranty deed from the seller is a more risky proposition.

Now, you have the issue of whether or not you can even GET title insurance when the seller is giving you a quit claim deed. Most title insurers will flinch at the prospect and may refuse to insure.

Back to your query, I would have to say that IF you can get title insurance over a quit claim deed, only YOU can decide if it is OKAY.



Wine Dog said...

While it's possible get title insurance if title is derived from a quitclaim deed, I wouldn't. If the question came to me as a Title Officer I would advise against it and refer you to counsel for further explanation. Then hopefully I wouldn't spend the afternoon arguing with your attorney. :)

We use Grant Deeds almost exclusively out in California (Warranty Deeds are more of an East Coast thing) and if it's a difference of which form you load into the computer or buy at the stationary store, I would always use a Grant Deed, (Warranty Deed outside of the Golden State). It is an absolute conveyance where the grantor grants and conveys as opposed to a quitclaim the grantor quits any claims.

Quitclaims are best saved for releasing non-titled spouses, crusty old easements and leasehold interests.

and that's my final answer.

Diane Cipa said...

Thanks, WD!