Question: I have another question about quitclaim deeds. I’ve read your columns in the past where you talked about a fiance wanting to file a quitclaim deed to separate himself from his future wife’s ownership of the house.
Our case is almost the opposite. My wife owned a house prior to our
marriage. After we got married, she filed a quitclaim deed to add myself as a co-owner to the house.
Is this also a correct and legal use of the quitclaim deed? Additionally, because quitclaim deeds offer no warranties, does my wife’s original title insurance still protect her, myself or both?
Answer: Quitclaim deeds are one of the most misunderstood documents in real estate. I get so many questions on this topic that I could write about it almost every week.
First, for readers who may have missed my previous columns, let me explain what a quitclaim deed is. As its name implies, the person granting the deed is quitting (giving up) some or all of their legal ownership rights in a certain piece of real property. That’s all it does. As your letter points out, a quitclaim deed offers no warranties.
For example, I could grant you a quitclaim deed to Safeco Field and you could even go down to the King County courthouse and record it. But even though I am a Mariners season ticket holder, I don’t have any ownership interest in Safeco Field, therefore the deed is a worthless piece of paper. There is no warranty that I have any ownership interest in Safeco Field, I am simply giving you whatever interest that I may have, which is none.
By contrast, a warranty deed warrants that someone is the legal owner of the property being transferred. That’s why most real estate transactions in this state use a warranty deed. Quitclaim deeds are typically used only between parties who know each other well and don’t need legal proof that the grantor of the deed actually owns the property. A common example is a divorce, where the jointly owned home is transferred from the married couple to one spouse.
In your case, your wife used a quitclaim deed to add your name to the title of the house after your marriage. That is another common use of a quitclaim deed and it is perfectly legal. However, your wife’s title insurance policy does not protect you because you were not on the title when the policy was issued. The purpose of insurance is to identify all liens and ownership claims against a specific property as of a certain date. When you buy a home, the title insurance insures clear title up to the date that the purchase and sale transaction closes. In the case of a refinance, title insurance insures clear title up to the date that the new mortgage loan closes. Unless you purchased a new policy when your wife recorded the quitclaim deed, you would not be covered.
However, this is not something you really need to worry about too much because I assume that you are aware of any loans or liens that existed against the property at the time your name was added to the title. Your wife is the person who is most at risk in this transaction because adding your name to the title of the property does not add your name to any mortgage on the property. The loan is in your wife’s name only, so you have the best of all worlds: You are an owner of the home but you have no legal obligation to make the loan payments.
If you refinance the mortgage on the home in the future, you will probably be required to sign the loan documents because most mortgage lenders want to make sure that all owners listed on the title to the property are also on the loan.
Mail your real estate questions to Steve Tytler, The Herald, P.O. Box, Everett, WA 98206, or e-mail him at economy@heraldnet.com.
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