A Quitclaim Deed is used to transfer real estate if the transferor will not warrant or guarantee that the transferor has clear title to the real estate. This could occur if the transferor is not receiving anything of value for the property and doesn’t want to be liable for any title issues.
Quitclaim deeds are very common in most states, but disfavored in Texas. A Deed Without Warranty is often a better choice for transferors that wish to convey Texas real estate with no warranty of title. A Texas quitclaim deed form is sometimes erroneously referred to as a Texas quick claim deed or Texas quit claim deed.
An Overview of Quitclaim Deed Forms in Texas
A Texas Quitclaim Deed form usually omits the phrase “grant, sell, and convey” that is used in the Warranty Deed form provided by statute in Section 5.022 of the Texas Property Code. Instead, a Quitclaim Deed form will often use the word “quitclaim” or a similar phrase like “remise, release, and quitclaim” as an alternative.
This may seem like a subtle distinction, but there is a reason behind it. A person that conveys property by Quitclaim Deed does not claim to convey clear title to the person who receives the property. By omitting the “grant, sell, and convey” language, a Quitclaim Deed makes it clear that the person transferring the property is not liable for any problems with title.
Stated differently, Quitclaim Deeds contain no warranties of title. Instead, the person transferring the property is simply giving whatever interest he or she has to the person receiving the property. As one Texas court stated:
A quitclaim deed conveys any title, interest, or claim of the grantor in the real property, but it does not profess that the title is valid nor does it contain any warranty or covenants of title. Thus, a quitclaim deed does not establish title in the person holding the deed, but merely passes whatever interest the grantor has in the property.” Diversified, Inc. v. Hall, 23 S.W.3d 403 (Tex. App.–Houston [1st Dist.] 2000, pet. denied).
The Problem with Quitclaim Deed Forms in Texas
Everything stated above about Quitclaim Deeds is true in many other states. A Quitclaim Deed is, by definition, one that conveys whatever interest the transferor has in the property with no representations, warranties, or guarantees about title. Quitclaim deeds are valid in other states, and they are also valid in Texas. The problem isn’t with the validity of the deed, but with title insurance.
Texas title insurance companies are notoriously wary of Quitclaim Deeds. The problem has to do with the way that title insurance companies interpret Section 13.001(b) of the Texas Property Code. That Section states that unrecorded instruments are “binding on … any subsequent purchaser who does not pay a valuable consideration.” Some title insurance companies believe that transfers made without consideration—as Quitclaim Deeds often are—are subject to risk of a prior conveyance. Because of this risk, title insurance companies are reluctant to insure title to property when there it a Quitclaim Deed in the chain of title.
A Better Alternative: A Deed Without Warranty
Texas law recognizes a form of deed that is not common in other states: The Deed Without Warranty. A Deed Without Warranty is like a Quitclaim Deed in that the seller is not liable for any title defects. But, unlike a Quitclaim Deed, a Deed Without Warranty is an actual conveyance. A Deed Without Warranty deed form will use the normal “grant, sell, and convey” language found in other forms of Texas deeds like General Warranty Deeds and Special Warranty Deeds.
Because the Texas Deed Without Warranty uses the “grant, sell, and convey” language, Texas title companies are more comfortable with Deeds Without Warranty than Quitclaim Deeds.