In real estate and property law, one crucial document is a deed. A deed is a document signifying legal transference of ownership from one party to another party. Two types of deeds are warranty deeds and quitclaim deeds. This article will help explain the difference between them.
A warranty deed is a deed wherein the granter, or the person selling/handing over interest in the property, guarantees that they have clear title to sell the property to the grantee, or person receiving interest in the property. Clear title, in legal terms, means that the current owner of the real estate owns it free of encumbrances. For example, if one wanted to sell their house and the house was still mortgaged, the person who owns the house would not have clear title. With a warranty deed, the grantee has far more property security, because it is the granter that is fully responsible for the property. Warranty deeds are most common when conveying ownership of a house from granter to grantee.
A quitclaim deed is a deed that transfers title to the grantee without guaranteeing to the grantee that the granter has any interest in the property itself, or the title is clear. In other words, it is not warranting that the granter is at all responsible for the property, or even has any interest in the property. As David Eagan puts it, as quoted from bankrate.com, it’s like saying “I’m not warranting what I own, but I’m transferring what I do own to you.” A quitclaim deed offers the grantee less security because legal responsibility will fall upon the grantee if any complications, such as an encumbrance, arise. Quitclaim deeds are most common when ownership is transferred between family members.
|Warranty deed||Quitclaim deed|
|Guarantees clear title.||Does not guarantee clear title.|
|Granter will have legal responsibility for issues such as encumbrances.||Granter will not have legal responsibility for such issues.|
|Higher level of security for grantee.||Lower level of security for grantee.|
|Often used when selling a house.||Often used when transferring property between family members.|
The main differences are:
- Whether or not there is guarantee of clear title
- Whether or not the granter is legally responsible for the property
- Grantee’s security level for both deeds
- The different use of both deeds
Warranty deeds guarantee clear title, meaning the property is free of encumbrances when selling. Quitclaim deeds, however, do not.
The granter in a warranty deed is legally responsible for the property, and if any issues arise, such as encumbrances, the grantee has legal recourse because of this. The granter will be responsible for the legal issues. In a quitclaim deed, however, the granter is not legally responsible for the property; they do not warrant it.
A grantee has a higher level of security with a warranty deed, because the granter will be responsible for legal issues such as encumbrances. Quitclaim deeds offer lower levels of security because the granter will not have any legal options for recourse.
Warranty deeds are most often used in the sale of property such as houses. Quitclaim deeds are most often used when property is transferred between family members.
The video below explains some differences between the two deeds. It also suggests using a warranty deed when transferring property between families; however, quitclaim deeds are generally used for this purpose.