6 minute read

Warranty Deed vs Quit Claim Deed: What’s the Difference?

You may have heard the terms "warranty deed" and "quit claim deed" - but what's the difference between them? T&W explains.

Patrick Hicks

Patrick Hicks, @PatrickHicks

Head of Legal, Trust & Will

So you’re planning your estate and you’re wondering how you can transfer your property to a loved one. You’ve heard that you can achieve the same outcome by using either a warranty deed and a quit claim deed. The questions here are: what are they, and which one is the better option? Is there a reason why you would use one over the other? 

This guide was created with the intention of helping you choose the option that works best for your needs. We’ll do that by explaining the differences between a warranty deed vs. quit claim deed, and then tips on how to decide. Let’s get started by defining these two tools first.

What is a Warranty Deed?

A warranty deed is a type of real estate document that certifies that a property is owned “free and clear.” This means that the owner of the property is legally clear of any outstanding mortgage, liens, or other types of claims that could potentially be made against a house. A warranty deed is used to provide proof of ownership of real property. 

When a property owner transfers the deed to another party, then that individual can rest assured that the title is clear of any claims.

To learn more about how a warranty deed works, plus answers to common questions about warranty deeds, visit our warranty deed guide.

What is a Quit Claim Deed?

A quit claim deed is another type of legal document that is used to rightfully transfer real property to another person. It’s typically used for real estate, such as a house or land. In other words, you can use a quit claim deed to gift your house to a loved one.

Visit our quitclaim deed resource page to learn more about how you can incorporate this key legal document into your estate plan.

Is a Quit Claim Deed Safe?

To be frank, a quit claim deed only offers a limited amount of protection. Its sole purpose is for the transfer of ownership of a property. It does not guarantee the quality of the title. The recipient is not protected against any outstanding liens or claims against the house. They also only inherit the previous owner’s interest in the property, meaning that they would become liable for outstanding mortgage and interest payments.

For these reasons, quit claim deeds are typically only used in certain scenarios. For starters, they are often used to transfer title on a property when no money is involved. It is perfectly common for a parent to gift their home to their child using a quit claim deed as a part of their estate plan.

Quitclaim deeds should also only be used when there is no outstanding mortgage. This is because a quitclaim deed only changes who owns the title to the property, but not the mortgage itself. This means that the grantor is still liable for the mortgage, even after the transfer has taken place. This means that they’ll be in trouble if their grantee (such as their child) suddenly stops making payments, or decides to sell the property to another party.

In summary, quitclaim deeds should only be used when the property is owned free and clear, and the transfer of ownership is being provided as a gift, and not as a financial transaction. Recipients of the property should only accept a quit claim deed from a trusted person, such as a family member.

Biggest Difference Between Warranty Deed and Quitclaim Deed

So far, we’ve learned that a warranty deed and a quit claim deed are both legal documents that can be used to transfer ownership of real property. It may still be a little unclear as to what makes them different from one another, and whether one option is better than another.

The key difference between a warranty deed vs. quitclaim deed is the level of protection offered. 

Here are some additional differences, explained:

  • A quit claim deed is used to release personal interest in a property so that it can be transferred to another party. It does not make any guarantees about the validity of the title, or whether or not there are outstanding claims.

  • A warranty deed is used when the grantor promises that the title is clear of any claims.

  • Quit claim deeds are typically used when no money is involved, and ownership is being transferred between two parties that trust another. For example, quit claim deeds are often used when a parent wishes to give a property to a child as a gift.

  • Grantees of a quit claim deed are exposed to possible ownership and claim conflicts. Both parties have limited legal recourse if anything goes wrong.

  • Warranty deeds are typically used for any arms’ length real estate transactions. Buyers can sue the seller for breach of warranty if it turns out that the seller didn’t actually have the right to sell that property.

If you are planning to gift a property to someone you love, then using a quit claim deed could be perfectly acceptable. This is especially true if there is a high level of trust between both parties, and you’re confident that you own the property free and clear. As a grantor, you won’t be at risk in case the grantee decides to suddenly sell the property, especially if there happened to be a “due on sale” clause on your mortgage. As the grantee, you wouldn’t be worried about any outstanding claims or liens on the property. Again, the perfect example is when a parent merely wants to give the title of their home to a child as a part of their estate plan, no strings attached.

Alternatively, you may want to consider using a warranty deed if you want better protection. As a buyer, there’s always some risk involved when receiving a title of a property. Even if the seller says that there are no outstanding claims on the property, it isn’t a guarantee. This is why many buyers often demand a warranty deed instead of a quit claim deed in the case of a real estate transaction. 

Similarities Between Warranty Deeds and Quitclaim Deeds

Although warranty deeds and quitclaim deeds are quite different in nature, they still share some similarities. Here they are below:

  • Both are legal documents that are used to transfer ownership of a property.

  • Warranty and quit claim deeds are binding documents that must be filed with local courts.

  • Both can be utilized in an estate plan to give property to another party.

  • Quitclaim and warranty deeds require similar pieces of information such as defined property boundaries, property description, proper documentation, clear language of conveyance, and signatures of all parties involved.

  • Both types of deeds must be made in writing and must hold up in a court of law to be valid. 

Get the Help of an Expert in Deciding Between Warranty Deed vs Quit Claim Deed

The key difference between a warranty deed vs. quit claim deed is the level of protection offered by each type of document.

A quit claim deed offers the least protection, and is best used when a piece of property is being gifted to a trusted person, such as a loved one. It’s advised to use this type of deed when there is no money involved in the transaction, and the owners are absolutely sure that there are no outstanding claims on the property. 

A warranty deed offers the strongest protection. It protects the party receiving the property title in case there turns out to be any issues with the title. In a worst-case scenario, the buyer can sue the seller if they find out that the property had any liens or claims against it. Most buyers often demand that the seller utilizes a warranty deed instead of a quit claim deed.

At the end of the day, however, both types of deeds serve the same function: to legally transfer the title of a property from one party to another. The question you should be asking yourself is what level of protection you’re seeking. In some cases, a quit claim deed will perfectly suffice. In other cases, you might opt for a warranty deed and have peace of mind knowing that you have better protection.

Are you interested in including real property in your estate plan? Trust & Will can help you incorporate either a quit claim deed or a warranty deed so that you can one day transfer property to a loved one! Get started today.

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