Underwriting Manual: TX 16.04 Quitclaim Deeds

A "quitclaim deed" is a deed which conveys whatever interest the grantor has in the property, as distinguished from a grant of the fee or other estate with warranty of title.

Ordinarily a warranty deed is used to transfer a fee simple interest. A quitclaim deed is not commonly used to convey a fee. It is usually restricted to releasing or conveying minor or secondary interest in real estate or for the purposes of clearing title defects or clouds on the title.

Quitclaim deeds, though very useful in the elimination of title clouds or imperfections, are often considered by title insurers as ?red flags? in the chains of title.

Under Texas law, a quitclaim deed conveys title if the grantor actually has title.  The reverse is also true, if the grantor didn't have title, nothing was conveyed.  And the doctrine of after acquired title does not apply so that if the grantor subsequently obtained title, title was not conveyed by the earlier quitclaim deed.  Our position on the use of quitclaim deeds is as follows:

1. Current transaction, unrelated parties: not usually acceptable.
2. Current transaction, related parties: ok unless buyer is using homestead property as collateral for loan buying out other parties, in which case an owelty deed will be required.
3. Quitclaim deed, unrelated parties more than 10 years old: ok to use without exception or requirement
4. Quitclaim deed, related to parties more than 5 yrs old: ok to use without exception or requirement.

In any other situation, please call our Texas Underwriting Counsel.