Buying as an Individual - Transferring to a Business

[Alvin Pereira]

Hi my BP Family! I've heard a few times that you can't buy/mortgage a house as an individual and then transfer it to a business. The primary reason one would want to do this is to get a mortgage since most banks won't give a mortgage to an entity. However, I also keep hearing the great Brandon Turner saying he's mortgaged property under his name and then placed them under a business. Anyone have any experience or thoughts on how to do this? Thanks for the help! - Alvin

[Josh Crowfoot]

Steve, you are correct.  A quitclaim deed provides the least amount of protection for the acquirer of real property.  It conveys any interest the grantor (i.e., seller) has to the grantee (i.e., buyer), but it provides no warranties of title.  A special warranty deed or limited warranty deed is better because it warrants title against the grantor and any of his heirs, successors, or assigns.  A general warranty deed is best (although rarely given), and it is a warranty of title up the entire chain of title.  Quitclaim deeds do not negate title insurance.  I am not sure where you heard that from.  In fact, quitclaim deeds are routinely used in numerous jurisdictions across the country every day without any sort of effect on title insurance.  I am not sure why a quitclaim deed, in of itself, would be a red flag for you.  It's simply a way of conveying title without providing any warranties.  Some parties feel inclined to convey property that way; others do not.  As for my professional designation, I am a commercial real estate attorney licensed in Georgia and South Carolina as well as a licensed broker in South Carolina.  I hope this information helps.