Maine Quitclaim Deed With Covenant Form
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What Is a Maine Quitclaim Deed With Covenant Form?
A Maine quitclaim deed with covenant is a type of deed used to transfer real estate in the state of Maine. A quitclaim deed with covenant provides a limited guarantee of title, with the grantor only warranting against claims and encumbrances that arose during their ownership of the property. It does not provide any guarantee against defects in title that may have existed before the grantor took ownership. In this way, a quitclaim deed with covenant offers less protection to the buyer compared to a Maine warranty deed, which warrants against all claims and defects in title throughout the entire history of the property.
Maine quitclaim deeds with covenant are the equivalent of what many other states call special warranty deeds. Maine law provides a statutory form for a quitclaim deed with covenant.1
What Is Warranty of Title?
A warranty of title is a legal guarantee provided by the grantor (or seller) to the grantee (or buyer) in a real estate transaction. The warranty assures the buyer that the grantor holds clear title to the property, has the legal authority to transfer ownership, and that the property is free from any liens, encumbrances, or other defects in the title that would hinder the buyer’s rights.
There are different types of warranties of title, depending on the level of protection offered to the buyer. In a Maine warranty deed, the grantor provides a full warranty of title, ensuring the buyer that the title is clear and free from defects not only during the grantor’s ownership but also throughout the entire history of the property. This warranty covers any claims, liens, or encumbrances affecting the property and provides the buyer with the right to seek legal recourse against the grantor if any issues are discovered.
In a Maine quitclaim deed with covenant, the warranty of title is limited. The grantor only warrants against claims and encumbrances that arose during their ownership of the property. They do not provide any guarantee against defects in title that may have existed before they took ownership. This offers the buyer a lesser degree of protection compared to a warranty deed.
Other Names for a Maine Quitclaim Deed with Covenant Form
Using the term quitclaim deed with covenant to describe a deed that transfers property with a limited warranty of title is unique to Maine and a few other states. More common names for this type of deed are a special warranty deed, a limited warranty deed, a grant deed (in California, for example), or a covenant deed (in Michigan).
How Do Maine Quitclaim Deed with Covenant Forms Relate to Other Forms of Deeds?
In Maine, there are several types of deeds used to transfer real estate, each with different levels of warranties and protection for the buyer. The Maine quitclaim deed with covenant offers limited protection. Maine warranty deeds more protection, and Maine quitclaim deeds without covenant provide less protection.
- Maine warranty deed. A Maine warranty deed form provides the highest level of protection for the buyer. The grantor guarantees that they hold clear title to the property, have the legal authority to transfer ownership, and that there are no liens, encumbrances, or other defects in the title.2 This warranty covers the entire history of the property, not just the time the grantor owned it. If any issues arise, the buyer can seek legal recourse against the grantor.
- Maine quitclaim deed without covenant. A Maine quitclaim deed without covenant form (also called a release deed) offers the least protection to the buyer, as it does not provide any warranties or guarantees regarding the title. The grantor transfers their interest in the property, if any, to the buyer without making any assurances about the quality of the title. The buyer assumes all risks associated with potential title defects and has no legal recourse against the grantor if problems arise.3
A Maine quitclaim deed with covenant offers a level of protection that falls between the warranty deed and the quitclaim deed without covenant. It guarantees the buyer protection against claims and encumbrances that arose during the grantor’s ownership, but not against defects that may have existed before that time.
Maine Title Insurance and Special Warranty Deeds
Title insurance is a form of indemnity insurance that protects the buyer and/or the lender in a real estate transaction against financial loss resulting from defects in the title, liens, or other encumbrances. There are two types of title insurance policies: owner’s title insurance and lender’s title insurance. Owner’s title insurance protects the buyer’s investment in the property, while lender’s title insurance protects the lender’s financial interest in the property. Both policies cover legal expenses and compensation for financial loss if a covered title defect arises during the policy period.
When a Maine quitclaim deed with covenant is used in a property transfer, title insurance can be particularly beneficial for the buyer due to the limited warranty provided by the grantor. Since the quitclaim deed with covenant only warrants against claims and encumbrances that arose during the grantor’s ownership, the buyer might be left unprotected against title defects from before that time. Title insurance can help bridge this gap in protection and provide the buyer with additional security and peace of mind.
Before issuing a title insurance policy, a title company thoroughly searches the property’s public records to identify any potential defects, liens, or encumbrances. If issues are discovered, the title company will either require them to be resolved before closing or list them as exceptions in the policy, meaning they will not be covered.
Maine Quitclaim Deed with Covenant Forms and Other Maine Deeds Used in Estate Planning
Estate planning is the process of arranging for the management and disposal of a person’s estate during their lifetime and after their death. In Maine, several types of deeds can be used for estate planning purposes.
- Maine life estate deed. A life estate deed allows a person to retain ownership of the property for the rest of their life, while transferring to a beneficiary the right to own the property after the current owner’s death. Upon the owner’s death, the property automatically transfers to the beneficiary, known as the remainderman, without going through probate. After recording a life estate deed, the owner can sell or mortgage full ownership of the property only with the beneficiary’s consent.4
- Maine transfer-on-death deed (TOD deed). A Maine transfer-on-death deed allows a property owner to designate a beneficiary who will receive the property upon the owner’s death without going through probate. The owner retains full control and ownership of the property during their lifetime and can revoke or change the beneficiary designation at any time.
Common Uses of Maine Quitclaim Deed with Covenant Forms
A Maine quitclaim deed with covenant is used in various situations where a limited warranty of title is acceptable or preferred. Some common uses for a quitclaim deed with covenant in Maine include:
- Real estate transactions between parties who have an existing relationship or trust, such as family members or friends. In these cases, the parties may feel comfortable with a limited warranty due to their familiarity with the property’s history.
- Transactions involving properties with a known history of title issues or potential risks, where the buyer is willing to assume the risks in exchange for a discounted purchase price.
- Transactions where the grantor has only held the property for a short period and may not have sufficient knowledge of the property’s full title history to provide a complete warranty.
- Real estate transactions involving institutional sellers, such as banks or government entities, which often use quitclaim deeds with covenant to limit their liability for title defects.
- Transactions where the buyer plans to conduct their own extensive title search or obtain title insurance, providing them with additional protection against potential title defects.
How to Create a Maine Quitclaim Deed with Covenant
As with any deed, a Maine quitclaim deed with covenant should be customized to reflect the specific terms and conditions of the transaction. Reliance on fill-in-the-blank forms can lead to invalid documents and future title issues.
A quitclaim deed with covenants must include specific language that clearly indicates the grantor is only warranting against claims and encumbrances that arose during their ownership of the property. The deed must also meet Maine’s deed recording requirements and include necessary information, such as the names of the grantor and grantee, a legal description of the property, and any relevant restrictions or exceptions. The grantor must sign the quitclaim deed with covenant in the presence of a notary public, who will acknowledge and notarize the document.
To provide constructive notice of the property transfer and protect the grantee’s interests, the quitclaim deed with covenant should be recorded with the appropriate Maine county’s register of deeds office. The register of deeds may have specific requirements regarding formatting, fees, and additional documentation, which should be reviewed before submitting the deed for recording.
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