A specific type of deed that conveys interest in a property. A "quit claim deed" is the least powerful sort of deed. It transfers whatever interest the grantor has in the property to the grantee. If I, as the grantor, give you a quit claim deed for the golden gate bridge, I've given you a perfectly legal, fully enforceable document that transfers exactly nothing. If I give you a quit claim deed for a property I in fact own, then you are now the owner.
I know that at least in Texas quit claim deeds are worthless. Title companies do not consider them a valid transfer of ownership. If there is a quit claim deed in the chain of title they will have to go back and get a warranty deed from them.
It really depends on the state. In most states if you have equitable ownership in the property a quit claim is a legitimate method for the transferor to disclaim his or her interest in the property. They are used quite a bit between husbands and wives and other family members.
I've seen it thrown around a few times but, I am not sure I fully understand what it is. Please enlighten me.
In my best Rodney Dangerfield voice, "Take my house, please...."
It means you get the house and every dirty little secret that goes with it. Every bit of profit potential with every tax lein, mechanics lein, unpaid property taxes, irs lein, code enforcement violations, unpaid utilities, overdue library books, etc....
From what I have been able to learn. The quit claim deed is just that,
You are declaring that you quit any and all claims that you may have against said deed.
If you had no claims (or interest) in said than the quit claim deed is worthless. But if you do have any valid claim against said deed, with proof that will be upheld in any court, then you are transferring that interest to the recieving party.
This would even apply in Texas, but as I said it would have to be backed up with absolute proof of that interest which would hold up in a court of law.
In Texas, title companies do NOT recognize quit claim deeds as a valid transfer of interest.
They are worthless in the eyes of a title company. If the husband quit claimed the house to the wife, and the wife is selling it to you, then the title company will require the husband to RESIGN a warranty deed to the wife (or actually to you).
I have personally had multiple deals at different title companies where we had to have quit claims redone with warranty deeds to clear the title.
It has nothing to do with having or not having a valid claim against the property.
In Texas, title companies do NOT recognize quit claim deeds as a valid transfer of interest, period.
In Texas, title companies do NOT recognize quit claim deeds as a valid transfer of interest.
They are worthless in the eyes of a title company. If the husband quit claimed the house to the wife, and the wife is selling it to you, then the title company will require the husband to RESIGN a warranty deed to the wife (or actually to you).END QUOTE
Begin my statement. Somehow the quote thing did not come out the way it was supposed to.
It does not matter what a title company says about quit claim deeds. The only thing that matters is what a court of law says.
While some title companies may choose to guarantee a clean title others may. But then again you do not have to have their insurance to do things. You can choose to take that risk upon yourself. So the original statement still stands
But if you do have any valid claim against said deed, with proof that will be upheld in any court, then you are transferring that interest to the recieving party.
This would even apply in Texas, but as I said it would have to be backed up with absolute proof of that interest which would hold up in a court of law.
Well, Jim, I'm going to have to disagree with you by agreeing with you.
Title companies are really the only thing that matters to an investor. I say that because title companies base their decisions of title insurance on the case law. So the title companies base it off what the court of law says and an investor, in basing it off the title company, have in essence based it off the court of law.
Quit claims in Texas are not recognized by title companies because there is case law in Texas that has pigeon-holed their validity. The title companies didn't make up the rules. They are just following what the courts have decided.
I would also STRONGLY advise any investor to get title insurance on any property and in the very least have a title search done.
If you can not get title insurance on a property, you have just drastically minimized your resell or refinancing possibilities. A lender will require there to be title insurance provided, so you won't be able to sell it to anyone using financing and you won't be able to refinance it yourself. You will have to pay cash and any buyer you sell it to will have to pay cash. On top of that any buyer will have to be willing to accept that they won't ever be able to sell it to anyone but a cash buyer and won't be able to refinance it also. Not to mention possible litigation from the title cloud.
All of which is true except that part of not ever being able to sell. After a certain period of time which does vary from State to State and I do not know what Texas time period is but after that time period is up (I am thinking 7-15 years) you can get title insurance and an absolutely clear title which can not be challenged because no challange was made during the challenge period.
Thus you now have a clear and unclouded title.
By the way I do agree with the total ineffectiveness of the quit claim deed and believe they should not be used or accepted by anyone. But my point was only to explain what they are and that they are a legal document that is accepted in all states legally despite their ineffectiveness sometimes.
Yes, we do agree, except in our implimentation aspect and in the legal aspects. But then again just because any legal binding contract (such as a mortgage) is legal it does not mean it can not be challanged in court and be found ineffective because of the decision of the judge. This does not make that kind of contract not legal in that state, it usually means another clause will be added to future contracts.
But in the case of the quit claim deed, not one has ever added the needed clauses so I do agree that the holes are many and large and you might not even be able to see the paper because of those holes!!!!!!!!!!!!