Transferring title in real property from one person to another can be really complicated. Probably most of us would have problems with carrying out this process properly. But why is it so difficult?
Simply because it demands certain written documents which have various forms and we must know which of them should be used in our particular situation. Professional help seems to be invaluable here, but it can look much simpler if we know the basics. This article presents a short explanation as a ground for more specific knowledge.
In short, to convey property you may need the general warranty deed, the special warranty deed or the quitclaim deed. What are the differences between them?
General and special warranty deeds
These are used to guarantee the good state of the title. They include covenants which will warrant protection for the new title holder from lawful claims of superior title and agreement about compensation for potential losses caused by a third party challenge of superior title.
The new title holder thanks to the general warranty deed will also have the right to purchase, possess and enjoy the property in question. In a special warranty deed we can find the issue of defects which were made under the seller ownership.
In the past, the quitclaim deed proved to be really valuable. There were times when land claims had to be made without unnecessary complications and this tool was ideal to convey titles. The most accurate example of such historical period can be The California Gold Rush. That time, the quitclaim played an important role in shaping the economy and social hierarchy and order.
In a quitclaim deed there are no warranties of title. It just conveys the seller’s interest in the property to the buyer. In practice, if you own a building, you can give a quitclaim to person who is buying it from you and in this way, your whole interest is being transferred. In a situation when a person who is not the owner of the property, gives out a quitclaim, the deed does not transfer anything and the document is just a useless piece of paper.
A quitclaim deed is a difficult tool of conveying the title, though. It is caused by the lack of fine points which are addressed in the general and special warranty deeds. When can it be used?
For example to remove defects in the title if we want to avoid litigation costing us time and
money. Moreover, establishing the title by the quitclaim can be followed by creating a general or special warranty deed so as to organize the rest of issues and more details connected with the ownership and purchase.