When transferring property in Texas, selecting the right deed can have significant financial and legal consequences. People sometimes use terms like “quitclaim deed” and “warranty deed” without truly understanding what is being transferred in the sale. As Texas real estate lawyers, we often advise clients about deed options because the choice between a warranty deed and a quitclaim deed is particularly important, as it affects the level of protection for both buyers and sellers.
The main difference between these two property transfer tools is the level of protection the buyer receives concerning the property's ownership and any title defects that may accompany the property. Before discussing them in detail, let's clarify what each legal instrument does in a property transfer.
What Is a Quitclaim Deed in Texas?
A quitclaim deed transfers only whatever ownership interest the grantor (seller) currently possesses in the property — nothing more. It makes no promises about the quality of that interest or whether other claims against the property exist.
Think of a quitclaim deed as saying, "I'm giving you whatever interest I may have in this property, but I'm not promising that I actually own it, that my title is good, or that there aren't other claims against it." The grantor "quits" any "claim" they have to the property without any guarantees.
Because of their limited nature, quitclaim deeds are sometimes used in low-risk situations between parties with established trust, typically family members or business partners. However, we rarely recommend the use of a quitclaim deed as title companies can view a quitclaim deed as a cloud on the title, causing issues when the property is being sold, transferred, or used as collateral in a loan.
What Is a Warranty Deed in Texas?
A warranty deed offers substantially more protection to the grantee (buyer). With this deed, the grantor (seller) makes specific legal promises about the property's title and their right to transfer ownership.
In Texas, these warranties typically include:
- Ownership guarantee: The grantor guarantees they legally own the property and have the right to sell it.
- Clean title promise: The grantor promises there are no undisclosed liens, mortgages, or other financial claims against the property.
- Undisturbed possession: The grantee can possess and enjoy the property without interference from others claiming rights to it.
- Title defense commitment: The grantor promises to defend the title against all claims from other parties, even after the sale.
These guarantees continue even after the transaction closes, giving the grantee legal recourse if title problems emerge later. Because of these protections, warranty deeds, which can be general and special, are the standard choice for most real estate sales, especially between unrelated parties.
Key Differences Between Quitclaim and Warranty Deeds
Understanding these key distinctions will help you determine which deed type is appropriate for your specific situation:
1. Protection Level
Quitclaim deeds provide absolutely no guarantees regarding the quality of the title being transferred. The grantor makes no promises about whether the title is good, marketable, or even if they have any ownership interest at all. In contrast, warranty deeds offer comprehensive protection against title defects by including explicit promises about title quality. These guarantees remain in effect indefinitely, giving buyers long-term security that their ownership interest is legally protected.
2. Extent of Property Interest Transferred
With a quitclaim deed, the grantor transfers only whatever interest they currently possess — which might be 100% ownership, partial ownership, or potentially nothing at all. This "what I have, if anything" approach offers no certainty about what's actually being received. Warranty deeds, however, convey complete ownership with specific guarantees about the quality and extent of that ownership, assuring the grantee they're receiving the entire property free from undisclosed claims.
3. Legal Remedies Available to the Buyer
If title problems surface after using a quitclaim deed, the grantee typically has no legal recourse against the grantor — they accepted the property "as is" regarding title. This can leave buyers in a difficult position if ownership issues arise later. With a warranty deed, the grantee can sue the grantor for damages if title issues emerge even years after the transaction. This ongoing liability creates a powerful incentive for sellers to resolve any potential title problems before transferring the property.
4. Distribution of Risk Between Parties
Quitclaim deeds place virtually all risk on the shoulders of the grantee (buyer), who must accept whatever title flaws might exist without remedy. This one-sided risk allocation makes quitclaims inappropriate for many transactions. Warranty deeds create a more balanced arrangement by shifting significant responsibility to the grantor, who remains liable for title defects that might surface in the future. This risk allocation explains why most arms-length transactions utilize warranty deeds — they protect the buyer's substantial investment.
5. Required Due Diligence and Investigation
The different levels of guarantee affect the preparation work needed for each deed type. Warranty deeds typically require thorough title research, including a professional title search and title insurance policy, to protect both buyer and seller from future claims. This investigation helps identify and resolve potential issues before closing. Quitclaim deeds, by contrast, may be executed with no investigation since the grantor makes no promises about title quality. This reduced preparation makes quitclaims faster and less expensive to execute, though with significantly less protection.
Is a Warranty Deed Better Than a Quitclaim Deed in Your Situation?
When deciding between these deed types, consider these factors:
- The relationship between the parties
- The value of the property
- Known or suspected title issues
- The need for future protection
- The grantor's willingness to accept continuing liability
- The grantee's risk tolerance
Generally, quitclaim deeds should be avoided. They could only apply to limited cases, and only after consulting with an attorney:
- Removing an ex-spouse from a property title after divorce
- Releasing interest in inherited property among heirs
- Transferring property between business entities with common ownership
Warranty deeds should be used for:
- Standard home purchase transactions
- Sales between unrelated parties
- Commercial real estate transactions
- Any transfer where the buyer is obtaining mortgage financing
- High-value property transactions
- Properties with complex ownership histories
- Situations where the buyer needs maximum legal protection
- Investment property purchases
Warranty deeds are strongly preferred in most arm's length transactions, especially those involving significant financial investment. They provide the security that most buyers require and that mortgage lenders typically demand.
