Every now and then (maybe every week) I hear someone saying they have made or want to make a Quick Claim deed–and by that they usually mean a relatively basic fast deed, in which they plan to add other names on the ownership of their real estate, often as part of a plan to avoid probate and leave property to others via “rights of survivorship.”
They are sometimes surprised to learn the term is a QUIT Claim deed, and NOT Quick Claim.
A quit claim deed means the seller, giver, grantor of the property is simply giving up, transferring or adding someone (quitting) to whatever interest they may have in the property. They are not making any guarantees about how solid their ownership rights in the property are when they use a quit claim deed. They may be a rock solid owner of the property, or they might not really have a solid claim on the property. But what they have, they are transferring, good or bad. If title insurance policies were issued on the property, the company may not defend afterwards if there is a challenge to the title of the property as there wasn’t a guarantee or warranty of good title passing with the property.
So a quit claim deed, used a lot, can be a valid way to transfer property. But should the property ownership or title to the property be defective in some way, those who buy or take or are gifted property via a quit claim deed have less recourse against the owner.
A warranty deed, on the other hand, implies what’s in the name–there is a sort of guarantee or “warranty” that comes with the deed/transfer of the real estate. Buyers or others who take via a warranty deed, would be able to sue the seller or grantor if title to the property was defective or they lost the property because it didn’t really belong to the seller/grantor in the first place.
One of the little things that happen, when one records a warranty deed at the local register of deeds office, is a property tax check. Local officials are asked to see if property taxes are up to date. This is because unpaid property taxes can cloud or muddy title on property. Important to a warranty deed, unimportant to a quit claim deed situation.
That fee, which had been only a dollar for many many years–maybe decades, was finally increased to five dollars beginning in July of this year, as part of legislation covering the issue and tax roll procedures at county offices. As discussed in the Charlevoix County Register of Deeds web page:
House Bill 4075 was passed by the House and Senate and signed by Governor Snyder on May 26, 2015. This bill has changed state law regarding fees associated with the purchase of tax records and tax certifications required on some documents recorded for the public record. The bill increases the fee from $1.00 to $5.00 on tax certifications for documents such as warranty deeds, land contracts, and condominium master deeds among others. These fees are collected by the Register of Deeds as part of the recording process. This portion of the bill goes into effect July 1, 2015.
Persons submitting documents that require a tax certificate need to plan accordingly to ensure their documents for land conveyances and related documents are not rejected due to lack of sufficient funds.
Deed drafting can have many consequences, and a few words in a deed can make a world of difference.
If you are thinking of transferring property to others, or “avoiding probate” or “avoiding creditors” or are worried about Medicaid’s possible “estate recovery” we suggest you meet or talk with an attorney BEFORE you do so. In my 32 years as an attorney I’ve seen too many messes and had to help too many people try to mop up after the fact when they didn’t fully understand what they were doing. And sometimes the property transfers or deeds have created problems that no amount of lawyering will fix.
Meanwhile, for those who wish to learn more on their own, here are some resources:
Michigan Land Title Standards: http://connect.michbar.org/realproperty/publicresources/landtitle
Recording Requirements for Deeds in Michigan (MCL 565.201 et seq) http://www.legislature.mi.gov/(S(bnzn1xmoo3gzkl2133qqgmha))/mileg.aspx?page=GetObject&objectname=mcl-565-201
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