There are essentially two types of deeds by which a property owner can transfer real estate in Indiana. A Quitclaim Deed transfers real estate to the new owner (the “transferee”), but the transfer is limited to the ownership interests actually held by the transferor. If the transferor holds no interests in the real estate, then nothing is transferred. By contrast, a Warranty Deed transfers both title to the real estate and a set of promises (“warranties”) that the transferor actually owns the property.
There are times when it is appropriate to use a Quitclaim Deed rather than a Warranty Deed. Alternatively, there are other circumstances when a transferee would require a Warranty Deed. Generally speaking, transferors prefer Quitclaim Deeds, while transferees prefer Warranty Deeds.
Unfortunately, it is common for non-lawyers to select the wrong type of deeds. A typical misuse is a real estate investor who uses a Quitclaim Deed to transfer an investment property to a corporation or limited liability company owned by the investor. Using a Quitclaim Deed in this situation could have unforeseen consequences for the investor.
If you are unsure of when to utilize a particular type of deed under different circumstances, the attorneys at GRIFFITH LAW GROUP LLC urge you to consult with an experienced real estate attorney. A brief consultation with a knowledgeable real estate attorney is almost always the most cost-effective means of avoiding a costly mistake.
