Both warranty deeds and quitclaim deeds perform the same essential function. They both transfer a title from one party to another. However, the fundamental difference is that a quitclaim deed transfers title “as is” whereas a warranty deed guarantees and warrants that the grantor (party transferring the property) has good, marketable title to the property.
A warranty deed provides five covenants of title:
- Covenant of seisin – seller warrants they are sole owner of the property.
- Covenant of the right to convey – seller warrants they have legal right to convey the property.
- Covenant against encumbrances – seller warrants that there are no undisclosed restrictions or encumbrances against the property, such as liens, judgments, or other limitations.
- Covenant of quiet enjoyment – seller warrants that buyer will not be affected by a defect in title.
- Covenant of general warranty – seller warrants that seller will protect buyer from any harm caused by title defects.
In contrast to a warranty deed’s warranties, a quitclaim deed offers no warranties and therefore little to no protection to a grantee (party receiving the property). If a property is quitclaimed that has a defect or liens against it, the grantee will likely have no recourse against the grantor because the grantee is accepting title as-is with no warranties that the title is clear or even that the grantor has a right to sell the property.
Warranty deeds are the standard deed used when selling real estate to an unrelated party. Quitclaim deeds are often used to transfer title between family members or one’s own entity (e.g., LLC, corporation, trust etc.). In general, a quitclaim deed should not be used when transferring property to an unrelated party. If you are a grantee, a quitclaim deed should only be considered in a transaction where you know and trust the grantor.