The two most common types of deeds are grant deeds and quitclaim deeds. Both deeds effectively transfer title; however, there are some significant differences between these two types of deeds.
Grant deeds “grant” an interest in real property to the grantee. The term “grant” is one of the key words in the deed that distinguishes a grant deed from a quitclaim deed. All grant deeds include the following two implied warranties: (1) the grantor did not transfer the same property to another grantee and (2) the property is free from encumbrances that were done, made, or suffered by the grantor. Such encumbrances include taxes, assessments, and liens but excludes any physical encumbrances that the grantee can see on the property. The grantor is personally liable for such encumbrances whether or not he knew about the encumbrance or defect in title; however, the grantor must have caused the encumbrance in order to be held personally liable for it. This warranty, though not explicit, exists in all grant deeds. They allow the grantee to sue the grantor in the event the grantor breaches either of these covenants.
Moreover, a grant deed grants both the grantor’s existing interest in the property and any after-acquired interest. For example, if the grantor jointly owns a property with a cotenant and purports to transfer the entire property to the grantee even though he does not own the entire property at the time of the transfer, if the grantor obtains his cotenant’s interest after the grantor signs the grant deed, the cotenant’s 50% will still transfer to the grantee.
A quitclaim deed transfers all the right, title, and interest the grantor holds in the real property at the time of the transfer. However, unlike a grant deed, a quitclaim does not include the above two implied covenants. Rather, a grantee in a quitclaim deed takes title to the property subject to all defects in the title and all equities against the grantor that existed at the time of the transfer. A grantee does not have the right to sue the grantor for any encumbrances on the property or defects in title.
Moreover, a quitclaim deed will not transfer any title acquired by the grantor after the time of transfer. Using the same example as above, if the grantor jointly owns a property with a cotenant and purports to transfer the entire property to the grantee even though he does not own the entire property, even if the grantor obtains his cotenant’s interest after the grantor signed the quitclaim deed, the cotenant’s 50% will not transfer to the grantee.
By: Carina Woo, esq.
See related: How Mistakes on a Deed Can Impact Chain of Title