Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

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Quit Claim Deeds & Owner Title Insurance

If you convey a property by Quit Claim Deed, the Owner’s Title Insurance protection may disappear.  Some purchasers/owners like to convey their properties to their own corporations, LLC’s, trusts, spouses, or other parties for liability purposes or estate planning.  If a Quit Claim Deed is used, there are no guarantees or warranties that the title is clear.

 
An Owner’s Title Policy protects the “Insured” listed in the policy, and unless the “Insured” is still an owner, the policy could expire.  However, if the “Insured” is the sole owner or beneficiary of the (new owner) corporation or trust, the policy might stay in force, but claims are still more difficult to make and recover on.  Each claim could be challenged, and many could be rejected.
 
If the “Insured” deeds 100% of the property (by quit claim) to another person or a less-than-100% related corporation or trust, the original Owner’s Title Policy does not provide any protection or recourse for the new owner, even if it is a spouse!
 
Suggestion:  Use a Warranty Deed instead.
 
In a Warranty Deed, the grantor “warrants” good title to the grantee, so if there is a title problem later, the grantee has recourse against the grantor, who can then rely on the original Owner’s Title policy for protection and support.
 

Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
lenox@neelandrobinson.com
404-705-3690     fax  404-705-3697

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This entry was posted on Saturday, March 20th, 2010 at 1:13 pm and is filed under Legal Tips By Neel & Robinson. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.