One of real-estate legal records, the warranty deed and quitclaim deed are all key to nearly all transactions. Both of these records are essential to the sales transaction; they’re necessary to legalize the transfer of property from seller to buyer. Warranty actions and quitclaim deeds have similar purposes, but they offer different levels of protection to this buyer.
Characteristics of Warranty Deeds
The warranty deed is produced and signed by the vendor at the real-estate final. It includes a full legal description of the property, and pledges that the seller owns clear title to the property changing hands. The warranty deed additionally guarantees that the land is free of all liens and encumbrances. The individual signing the deed and communicating the land is the grantor or transferor; the individual receiving the deed and the land is the grantee or transferee.
Function of Warranty Deeds
The warranty deed (also called in California as a grant deed) is a form of insurance to the buyer. In effect, this type of deed guarantees that the land he or she is purchasing belongs to the vendor free and clear and is not the topic of any claims by third parties. If a claim is presented to the buyer after the transaction is closed, then the seller who has issued the warranty deed is legally responsible for compensating the buyer for any damages or collection activities.
Functions of Quitclaim Deed
The quitclaim deed is often used when the property is not the topic of a conventional sales transaction. Quitclaim deeds are frequently utilized to convey property through a will or as a gift, or with a third party, such as a trustee for a charity, or who’s legally responsible for that land. Quitclaim deeds are also used when land boundaries are uncertain, or from grantors who are conveying the property to your spouse–as in the case of a divorce proceeding–or to business partner. The grantor of a quitclaim makes no guarantees he or she owns legal and clear title to the property.
Insurance Benefit
Warranty deeds could be further strengthened with some form of title insurance, which compensates the property owner in the event of any third-party claim on the property. Quitclaim deeds aren’t endorsed by name insurance, so offer you a lesser level of protection to the grantee.
Significance
Warranty actions and quitclaim deeds aren’t revenue records. They don’t carry information regarding sales price, mortgage loans, taxes or any other financial part of the transaction. Rather, they help protect the buyer against present or future claims against the property. With no signed and witnessed warranty or quitclaim deed, a property transaction is faulty.