Lecture Notes: Warranty Deeds vs. Quit Claim Deeds

Introduction

• Purpose: Clarify the differences between warranty deeds and quit claim deeds, particularly concerning liens and encumbrances on property.
• Context: A student expressed confusion regarding the guarantees associated with each type of deed.

Warranty Deed

• Guarantee Level: High; the seller guarantees good, clear title to the buyer.
• Good Title: Refers to a title free of liens and encumbrances.
  • Examples: Mortgages, judgments, tax liens.
• Seller's Obligation:
  • Must ensure the property is free and clear of encumbrances.
  • If not, the seller must resolve these issues (e.g., pay off a mortgage or lien).
• Exceptions:
  • Specific liens or encumbrances can be excluded if explicitly stated.

Quit Claim Deed

• Guarantee Level: Low; the seller offers no guarantee of title status.
• Title Transfer:
  • Transfers whatever interest the seller holds in the property.
  • No assurance of clear title; potential for clouds (liens, encumbrances).
• Buyer Responsibility:
  • Must conduct due diligence:
    • Perform a title search.
    • Obtain title insurance.
    • Seek a title opinion.
  • No recourse if there are issues with the title after transfer.

Key Differences

• Warranty Deed:
  • Assurance of clear title.
  • Seller responsible for resolving title issues.
• Quit Claim Deed:
  • No assurance of title status.
  • Buyer assumes risk and responsibility for title issues.

Conclusion

• If further clarification is needed, contact the lecturer.
• Reminder: Good luck on the exam.