When you want to quickly transfer a piece of property perhaps to a family member or out of a business entity without the hassle of a formal title search, you might be tempted to use what many mistakenly call a "quick deed." In Texas real estate, this typically refers to a quitclaim deed. However, real estate professionals and title companies often strongly recommend an alternative: the deed without warranty.
While both instruments allow you to transfer property legally and limit your future legal liability, they function very differently under the law and have vastly different impacts on the future insurability of the property.
The Trap of the Quitclaim Deed
A quitclaim deed is exactly what it sounds like: you are "quitting" your claim to the property.
When you sign a quitclaim deed, you are essentially saying, "I do not even know for sure if I own this property, but whatever interest I might have in it, I am transferring to you." You are making absolutely no guarantees.
Because a quitclaim deed lacks any representation of actual ownership, title insurance companies view them as a massive red flag. If a quitclaim deed appears in a property’s chain of title, it can become a permanent deal-killer. It signals a break in the guaranteed ownership chain, making it incredibly difficult—if not impossible—for the new owner to secure title insurance or sell the property later without undertaking complex legal actions to clear the title.
What is a Deed Without Warranty?
A deed without warranty is a much safer alternative for maintaining a clean chain of title.
Unlike a quitclaim, a deed without warranty actually states that you do own the property and that you are conveying that ownership to the grantee. However, it explicitly disclaims all warranties. It essentially says, "I own this property, and I am transferring it to you, but if it turns out my title is defective, you cannot come back and sue me."
Under Texas Property Code § 5.023, the use of certain words of conveyance, such as "grant" or "convey," automatically implies certain warranties of title (like guaranteeing there are no hidden encumbrances or taxes owed). A properly drafted deed without warranty uses these conveyance words but then specifically includes language stating that all warranties that might arise by common law or under the Texas Property Code are expressly excluded.
Practical Differences and Title Insurance
For the person transferring the property (the grantor), the practical difference in liability between the two deeds is minimal; neither allows the buyer to successfully sue you for a title defect later. However, for the person receiving the property (the grantee), the difference is massive.
- Quitclaim Deeds: Do not technically convey property; they only convey a potential interest. They generally cannot be insured by a title company.
- Deeds Without Warranty: Legally convey the property. Because there is an actual representation of ownership, title companies are much more likely to issue a title insurance policy, keeping the property's chain of title intact for future sales.
If you are looking to transfer property and want to limit your liability without destroying the property's future marketability, a deed without warranty is almost always the superior choice in Texas.
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