North Carolina Quitclaim Deed Form

What is a North Carolina Quitclaim Deed Form?

A North Carolina quitclaim deed form is a legal document transfers whatever ownership interest the signer holds with no guarantee of its validity or status. Like a non-warranty deed, a quitclaim deed provides no warranty of title and places the risk of title problems on the new owner.

North Carolina lawyers often use non-warranty deed and quitclaim deed as synonyms, and there is little practical difference between them. However, some title companies prefer non-warranty deeds over quitclaim deeds when insuring a North Carolina property’s title.

What is a North Carolina Non-Warranty Deed Form?

Much like a quitclaim deed, a North Carolina non-warranty deed is a written, signed document that transfers a real estate interest from the person who signs the deed (the transferor or grantor) to a new owner named in the deed (the transferee or grantee).¹ North Carolina law recognizes several types of deeds with different functions and legal effects.

A North Carolina non-warranty deed form transfers real estate with no warranty of title—which means the deed is not guaranteed to transfer valid ownership of the property. The transferee receives the property only if the transferor actually owns it. The transferor makes no promises about the status of the ownership interest he or she holds (if any).

What Is Warranty of Title in North Carolina?

Warranty of title is a guarantee the current owner gives to the new owner. The warranty a North Carolina deed provides (if any) is written in the deed. It consists of one or more legally enforceable promises—called covenants of title or covenants of warranty—made by the person who signs the deed.

A North Carolina deed that transfers real estate with complete warranty of title—or with general warranty—includes the following five covenants:²

1. Covenant of seisin. The transferor holds good title to the property.
2. Covenant of right to convey. The transferor has a legal right to transfer title to the property.
3. Covenant against encumbrances. No undisclosed encumbrances—such as liens, mortgages, or assessments—affect the property’s title.
4. Covenant of quiet enjoyment. The new owner will have undisturbed ownership and possession of the property.
5. Covenant of warranty. No third party will assert a superior title to the property.

Warranty of Title and North Carolina Non-Warranty Deeds and Quitclaim Deeds

Warranty of title protects the new owner against financial loss caused by problems with the property’s title. For example, a transferee forced to pay out money to resolve a title issue can sue the transferor to recover the costs the transferee incurred.³

North Carolina quitclaim deeds and non-warranty deeds provide no warranty to protect the new owner. That means the new owner takes title subject to any liens and is responsible for title problems that arise. A purchaser who takes title under a quitclaim deed, for example, has no right to sue for breach of warranty if the purchaser has to pay a lienholder to remove a lien on the property’s title.⁴

Title problems that can potentially affect a property’s title include:

• Outstanding liens, assessments, or property taxes;
• Boundary disputes;
• A gap in the property’s chain or title; or
• An error in an earlier deed or in the administration of a prior owner’s estate.

Other Names for North Carolina Non-Warranty and Quitclaim Deed Forms

North Carolina lawyers and courts typically use quitclaim deed and non-warranty deed as synonyms—or at least treat the two deeds as functioning in the same manner. Quit claim deed and deed of non-warranty are acceptable variations, and a North Carolina quitclaim deed is sometimes called simply a quitclaim.

Gift deed is a less formal term for a deed that transfers real estate for no consideration. The name gift deed is sometimes used for North Carolina quitclaim deeds and no warranty deeds. However, a North Carolina gift deed can provide a warranty.

Quitclaim deed is a common term in most other states, but only a few states use non-warranty deeds. Other names used in other states for deeds that transfer property with no warranty or covenants of title include:

• Release deed. A release deed typically surrenders a co-owner’s interest to another co-owner or resolves a disputed ownership claim.
• Quitclaim deed without warranty. A transferor can use a quitclaim deed without warranty to transfer ownership with no covenants of title in states where regular quitclaim deeds include one or more covenants.⁵
• Bargain-and-sale deed. In most states that use them, bargain-and-sale deeds convey property with no warranty—though they include implied covenants in a few states.⁶

How Do North Carolina Quitclaim and Non-Warranty Deed Forms Relate to Other Deeds?

North Carolina quitclaim deeds and non-warranty deeds transfer ownership as effectively as other types of deeds.⁷ The transferred interest, though, comes with no warranty or covenants of title. The new owner bears the risk of problems with the property’s title. A transferee who sustains financial loss caused by title problems cannot recover breach-of-warranty damages from the transferor.⁸

A deed with no warranty of title does not necessarily mean that there are actual problems with the property’s title—or even that the transferor suspects there may be problems. It just means that the new owner assumes the risk that a title issue might come up. North Carolina law recognizes other deed forms that transfer property with warranty of title and let the current owner keep some of the title risk.

North Carolina General Warranty Deed Forms

A North Carolina general warranty deed form—often shortened to warranty deed—keeps all title-related risk with the transferor. A property owner who signs a warranty deed guarantees a valid title with no undisclosed liens or other problems. The warranty covers the property’s entire ownership history. It only excludes issues the deed itself exempts or that the new owner is actually aware of at the time of the deed.⁹

North Carolina general warranty deeds are often used to transfer residential real estate purchased for fair market value.

North Carolina Special Warranty Deed Forms

A North Carolina special warranty deed form works like a general warranty deed with one key distinction. Its warranty covers only problems caused by the current owner’s actions or inaction.¹⁰ A title problem that arose before the current owner took title is outside of a special warranty deed’s warranty.

Special warranty deeds—sometimes called limited warranty deeds—divide the risk of title problems between the transferor and the transferee. The transferor bears the risk for issues that arose while he or she owned the property. The transferee is responsible for anything else.

The most common settings for North Carolina special warranty deeds are commercial real estate sales and deeds issued by fiduciaries like trustees or executors.

Title Insurance and North Carolina Non-Warranty Deeds and Quitclaim Deeds

The risk a new owner assumes when accepting real estate through a non-warranty deed or quitclaim deed can lead to substantial financial loss if a title problem arises. The loss caused by a title problem could be:

• Attorney’s fees incurred to remove a cloud from the title;
• The cost of paying a lienholder to release a lien; or
• Complete forfeiture of the property to a third party with a superior claim.

Purchasing a title insurance policy allows a property owner to reduce the financial risk of title problems by transferring some or all of the risk to the insurance company. The owner pays the insurer a lump-sum premium, and in return the insurer agrees to compensate the insured owner for losses caused by title problems.¹¹ Title insurance typically covers issues that exist but are unknown as of the date of the policy. Mortgage lenders often require title insurance as a condition of financing.

Non-Warranty Deeds and Other North Carolina Deeds Used in Estate Planning

Quitclaim deeds, non-warranty deeds, special warranty deeds, and general warranty deeds all have names based on the deed’s warranty of title. Other North Carolina deeds are named for their functions or settings.

The North Carolina estate-planning deeds described below—life estate deeds, ladybird deeds, and survivorship deeds—may provide warranty of title but do not have to. So, any of the three might also be a quitclaim deed or non-warranty deed. North Carolina estate-planning deeds with no warranty are typically titled Non-warranty Deed or Quitclaim Deed and often have a subtitle that references the deed’s estate-planning function.

North Carolina Life Estate Deed

A traditional North Carolina life estate deed lets an owner keep property for life and name another person—called the remainderman or remainder beneficiary—to take title outside of probate when the owner dies.¹² The downside is that a property owner who creates a traditional life estate deed can no longer transfer complete title to the property without the beneficiary’s consent. This is because the remainder beneficiary has a vested future interest after the life estate deed is signed and recorded.

North Carolina Ladybird Deed

A North Carolina ladybird deed (sometimes written lady bird deed) is a variation on traditional life estate deeds that lets the owner retain control over the property for life. Other names for ladybird deed include:

• Enhanced life estate deed;
• Life estate with powers deed;
• Life estate deed with powers; or
• Life estate with power of appointment deed.

A North Carolina ladybird deed works by reserving to the current owner both a life estate and a power of appointment that lets the owner sell, transfer, or borrow against the property.¹³ The owner’s interest is called an enhanced life estate because the right to transfer the property does not depend on the remainder beneficiary’s consent. The remainder beneficiary’s interest under a North Carolina ladybird deed is contingent, not vested.

The result of a ladybird deed is that the owner keeps the property and the right to transfer it for life. If the owner dies without having transferred the property, the remainder beneficiary takes title without probate.

Lady bird deeds are only used in a handful of states—notably including Florida, Texas, Michigan, and North Carolina. In some other states, like Maryland and Massachusetts—the same deed type may be called a life estate with powers.

North Carolina Survivorship Deed

A North Carolina survivorship deed transfers property to two or more co-owners with a right of survivorship—which means that a surviving owner automatically receives a deceased owner’s interest. Property that passes to a co-owner under a survivorship deed does not go through probate.

North Carolina recognizes two co-ownership forms with a right of survivorship: joint tenancy and tenancy by the entirety. Tenants by the entirety must be married spouses and have equal shares.¹⁴ North Carolina is one of the few states that allow joint tenants to hold unequal shares.¹⁵ For example, a property owner can record a survivorship deed that reserves a 99 percent interest to the owner and gives a family member a 1 percent interest.

Transfer-on-Death Deeds

North Carolina law does not recognize transfer-on-death (TOD) deeds. Where recognized, TOD deeds transfer property to a named beneficiary effective on the owner’s death without affecting the owner’s rights over the property during life. North Carolina allows transfer-on-death or similar payable-on-death designations for some other assets—for example, bank accounts and securities—but not for real estate.¹⁶

Common Uses of North Carolina Non-Warranty Deed and Quitclaim Deed Forms

North Carolina property owners typically use non-warranty deeds or quitclaim deeds to transfer property for no consideration or to retitle it without changing actual possession. A quitclaim deed or non-warranty deed might be suitable in any of the following situations:

• Survivorship deed. The owner transfers the property’s title to the owner and another person as joint tenants or tenants by the entirety to create a right of survivorship.¹⁷
• Divorce deed. Former spouses who co-own real estate transfer its title to one of the ex-spouses under the terms of a divorce decree or property settlement agreement.¹⁸
• Deed to trust. An owner transfers property to a living trust created for the owner’s estate plan, or a successor trustee transfers property to a trust beneficiary when the person who created the trust dies.¹⁹
• Gift deed. An owner transfer property to the owner’s children as a gift for no consideration.

How to Create a North Carolina Non-Warranty Deed or Quitclaim Deed

A North Carolina quitclaim deed or non-warranty deed must satisfy North Carolina’s legal requirements for all deeds while ensuring the transferor gives no warranty or covenants of title. Like all deeds, a quitclaim or non-warranty deed must also accurately reflect the owner’s intended transfer terms.

North Carolina Non-Warranty Deed or Quitclaim Deed Requirements

A deed that transfers title with no warranty must have vesting language that declares that the owner transfers the property but that does not expressly or implicitly create a warranty or covenants of title.²⁰ North Carolina quitclaim deeds typically say that the owner “remises, releases, and quitclaims” the property to the new owner. Non-warranty deeds typically say that the owner “grants, bargains, and conveys without warranty.”

Either deed must exclude language suggesting a warranty or covenants of title. Phrases like with warranty, general warranty, special warranty, generally warrants, or specially warrants should be avoided—except to the extent the deed is disclaiming a warranty. Words suggesting individual covenants of title—such as seisin, right to convey, against encumbrance, or quiet enjoyment—should likewise be avoided.

North Carolina does not require quitclaim deeds and non-warranty deeds to disclaim any warranty or covenants of title. A disclaimer nonetheless helps avoid ambiguity.

North Carolina General Deed Requirements

North Carolina has legal requirements that all deeds must meet. Among other things, a quitclaim deed or non-warranty deed must include the following items:

• Names and addresses of the current owner and new owner;²¹
• A legal description of the property;²²
• The name of the person who prepared the deed;²³ and
• A statement that the property is or is not the transferor’s primary residence.²⁴

Selecting a North Carolina Non-Warranty Deed Form or North Carolina Quitclaim Deed Form

A deed should transfer property under the parties’ intended terms. For example, North Carolina law assumes that a deed transfers the owner’s complete interest, but a deed can be modified to provide for a lesser interest.²⁵ A deed that names two or more persons as the new owners should specify their desired co-ownership form.²⁶

It is essential that a North Carolina non-warranty deed form or quitclaim deed form be created for use in North Carolina. A deed designed for another state may omit necessary information or result in unintended transfer terms. A legally flawed deed may be rejected by the register of deeds, fail to officially transfer the property, or cause long-term problems with the property’s title.

1. New Home Building Supply, Inc. v. Nations, 131 S.E.2d 425 (N.C. 1963).
2. Pridgen v. Long, 98 S.E. 451 (N.C. 1919).
3. See Markland Adm. v. Crump, 18 N.C. 94 (N.C. 1834).
4. See Pridgen v. Long, 98 S.E. 451 (N.C. 1919).
5. See, e.g., S.D. Cod. Laws § 43-25-11; 33 Maine Rev. Stat. § 765.
6. See, e.g., Colo. Rev. Stat. § 38-30-113(1)(c); Oreg. Rev. Stat. § 93.860(2)(b).
7. Hayes v. Ricard, 97 S.E.2d 105 (N.C. 1957).
8. See Pridgen v. Long, 98 S.E. 451 (N.C. 1919) (“If the purchaser has received no covenants, and there is no fraud . . . [the purchaser] has no relief for defects or encumbrances against [the seller], for it was [the purchaser’s] own folly to accept such a deed when he had it in his power to protect himself by proper covenants.”)
9. Hawks v. Brindle, 275 S.E.2d 277 (N.C. Ct. App. 1981).
10. See Spencer v. Jones, 84 S.E. 261 (N.C. 1915).
11. N.C.G.S. § 58-26-1.
12. N.C.G.S. § 39-6.3(a).
13. See Schaeffer v. Haseltine, 46 S.E.2d 463 (N.C. 1948).
14. N.C.G.S. § 41-56(b).
15. N.C.G.S. § 41-72(a).
16. N.C.G.S. §§ 41-41; 53C-6-7.
17. N.C.G.S. §§ 41-56(b); 41-71(b).
18. See N.C.G.S. §§ 52-10; 52-10.1.
19. See N.C.G.S. §§ 39-6.7(a) and (d).
20. New Home Building Supply, Inc. v. Nations, 131 S.E.2d 425 (N.C. 1963).
21. N.C.G.S. § 105-317.2(1).
22. Overton v. Boyce, 221 S.E.2d 347 (N.C. 1976).
23. N.C.G.S. § 47-17.1.
24. N.C.G.S. § 105-317.2(2).
25. N.C.G.S. §§ 31-38; 39-1.
26. See N.C.G.S. § 41-71.