The most important part of buying or selling property is the deed, which is the legal document that transfers the property title from the seller to the buyer. But not all deeds are the same. While there are multiple ways to legally transfer property such as a house, there’s one type of deed that those looking to transfer property in Texas don’t really use: quitclaim deeds.
What is a quitclaim deed?
Before understanding a quitclaim deed, you need to understand another main kind of deed, the warranty deed. Warranty deeds, which are used in the transfer of real property, protect the buyer’s new title from superior title claims. In other words, they protect the legality of the deed.
Quitclaim deeds offer no such protection. Instead, they only convey the seller’s interest in the property. This means that if the property owner wishes to sell their property, a quitclaim deed will provide a simple transfer of property. However, the buyer’s title will not be warrantied.
When to Use a Quitclaim Deed
If you’re still a bit confused by what a quitclaim deed is and what its use is, you’re not alone. Deeds are part of a complicated legal framework best navigated by real estate lawyers. However, understanding when quitclaim deeds are typically used may offer you a better understanding.
Quitclaim deeds are often used in property transfers between family members because the absence of a warranty requires a certain level of trust. Scenarios where a quitclaim deed may be used include:
- Parents transferring property to their children
- Siblings dividing up inherited property between each other
- Adding a spouse to a property title
- Removing an ex-spouse from a property title
Quitclaim Deeds in Texas
While quitclaim deeds are legal in all 50 states and used commonly in most of them, Texas is an outlier. The route of the problem is a single section of the Texas property code, which essentially states that unrecorded title transfers in the past are binding to subsequent purchasers. This has led to the majority of Texas insurance companies refusing to insure titles for homes with quitclaim deeds in the chain of title. As such, quitclaim deeds in Texas should be seen as red flags to potential buyers.
Your Deed Options
All of this doesn’t mean that using a quitclaim deed in Texas is completely useless. While you’ll likely want to stick to a warranty deed, quitclaim deeds can still be used in some situations. To ensure that your property transfer is done correctly, never relinquish or accept property through a quitclaim deed — or any other kind of deed — without first consulting an experienced real estate lawyer.
Dan Burke has been practicing law in San Antonio for 15 years, and he has extensive experience with real estate law. If you have questions about your property transfer, contact Dan Burke today and request a free consultation to get started.
