Quitclaim deed fundamentals and legal applications

Limitations With Quitclaim Deeds

Quitclaim deeds are typically used when property is transferred between family members or transferred without the involvement of money, meaning not sold. Quitclaim deeds are transfers without any warranty to what is owned. There is no legal recourse if there are title problems or disputes, such as a forgotten lienholder. It offers a lower level of protection than the warranty deed.

If Dr. Patel takes the mortgage for the loan, there is no guarantee he could take the land if payment of the loan is not made because there is no covenant of title. If a forgotten lienholder suddenly appears, Dr. Patel would have no legal authority to take the land from the lienholder. The same goes if there was judgments against the land that grandma had forgotten about. The quitclaim deed only gives the interest that grandma had in the property without any warranty. It does not give you the authority to sell the land or to convey the same right to another party, such as Dr. Patel.

If there was water rights on the land, such as rivers or lakes, the quitclaim deed does not specify exactly who owns the rights. With no rights specified, there are no rights given to sell or convey the land to another party. It only gives what interest the grantor has in the land. It would be giving Dr. Patel the interest in the land without fully knowing what that interest is.

On the other hand, if grandma had given you the land with a warranty deed, it would give you full protection with full rights to sell the land or transfer to another party. The warranty deed contains a covenant of title that is a promise that all encumbrances on the property have been disclosed. With the warranty deed, if Dr. Patel chose to accept a mortgage and give the loan, he would have full rights to take the land in case of nonpayment. Dr. Patel would then have full protection under law to sell the land to recover any unpaid balance on the loan.

If the land contained water rights, under the warranty deed the rightful owners would have to be named on the deed. It would be giving Dr. Patel all the rights that you have and named specifically in the deed. There would be no questioning to what interest you would have been given by grandma.