As a Michigan real estate professional, one of the most frequent questions I hear from clients is simple. What is the difference between a quitclaim deed vs. a warranty deed?
Both legal documents convey or purport to transfer title to real property. However, they carry very different legal consequences for the buyer, the seller, and anyone else holding a property interest.
Choosing the wrong deed for your situation can expose you to serious financial and legal risk. This guide walks you through exactly what each deed means, when professionals use each one, and how to decide which document protects your interests best.
Understanding this distinction is not just legal theory. It is practical knowledge that directly affects your ability to sell, refinance, or defend your ownership of real estate in Michigan.
Furthermore, a third option exists. Real estate professionals use the special covenant deed in specific circumstances. We will cover that middle-ground option as well.
What Is a Quitclaim Deed?
A quitclaim deed is a legal document where the person transferring the property conveys only whatever interest they currently hold. The transferring party represents the grantor, while the person receiving the property represents the grantee. The key phrase to remember is “whatever interest, if any.” The grantor is literally quitting, or giving up, any claim of interest they hold.
The critical legal consequence of this choice is the total absence of property guarantees. The grantor makes no warranties or representations to the grantee.
If the grantor turns out to hold no valid ownership interest, or if hidden title defects surface later, the grantee holds no legal recourse. The grantee receives exactly what the grantor possessed, which could be full ownership, partial ownership, or absolutely nothing.
Because the document attaches no guarantee, a quitclaim deed represents the simplest and fastest way to transfer property between known parties. However, that simplicity comes at a significant structural cost. The grantee receives no protection if something goes wrong with the title after the transfer closes.
What Is a Warranty Deed?
A warranty deed is a type of deed where the grantor guarantees that they hold clear title to the property. They promise that they possess the full legal right to sell or convey the real estate to the grantee. This represents the gold standard of property deeds in Michigan transactions.
Lenders, title companies, and sophisticated buyers almost always insist on receiving a warranty deed. The warranty functions as a legally enforceable commitment rather than a casual promise.
If the title contains undisclosed defects, active liens, or hidden clouds, the grantee can pursue the grantor for financial damages. This accountability forces grantors to conduct thorough due diligence and clean up any title issues before conveying the property.
The Six Covenants of a Michigan Warranty Deed
Warranty deeds provide the grantee with the maximum level of protection because they contain six distinct covenants. These legally binding promises bind the grantor to the grantee. Understanding what each covenant means is essential for any buyer or property owner.
1. Covenant of Seisin
The grantor promises to the grantee that they hold both valid legal title and actual physical possession of the property. If a grantor leases the property to a tenant without disclosing it, they breach this covenant. They no longer possess unfettered possession at the moment of conveyance.
2. Covenant of Right to Convey
The grantor promises that they possess the complete legal authority to transfer the real estate. For instance, if multiple parties own the property jointly, both co-owners must sign the deed. If only one signs and attempts to transfer full title, they breach this covenant. That single signer bears the legal responsibility to fix the document.
3. Covenant Against Encumbrances
This covenant promises that the real estate is entirely free of any mortgages, active liens, utility easements, or restrictions. The only exceptions are those explicitly listed within the deed text itself. If the grantee discovers an undisclosed lien later, the grantor must resolve it financially.
4. Covenant of Warranty of Title
This represents a forward-looking future covenant. The grantor promises to defend the grantee’s title against any future claims asserted by outside third parties. If someone steps forward later claiming superior ownership, the grantor must defend the title and resolve the dispute at their own expense.
5. Covenant of Quiet Enjoyment
The grantor promises that the grantee will enjoy unimpaired, unrestricted use of the property. If an undisclosed easement interferes with how the grantee intended to use the land, trouble follows. The grantee maintains the right to pursue the grantor for that interference.
6. Covenant of Future Assurances
Under this covenant, the grantor agrees to take any future actions necessary to perfect or protect the title. If a problem appears later, such as a misspelled name or a notary deficiency, the grantor must help fix it.
A quitclaim deed comes with none of these six protections. Only a warranty deed provides all six covenants.
When Is It Appropriate to Use a Quitclaim Deed?
Given the lack of protections, you might wonder why anyone would ever use a quitclaim deed. Several legitimate, practical situations exist where the lack of a warranty is acceptable and sensible.
Family Property Transfers
Professionals commonly utilize quitclaim deeds when transferring property between relatives. Examples include transfers from a parent to a child, between siblings, or between spouses.
In these situations, the parties share a level of trust. Formal commercial warranties remain unnecessary because the child already knows the property’s history.
Active Divorce Proceedings
A quitclaim deed regularly appears in divorce cases to remove one spouse from the title when the other receives the property. The goal requires transferring the departing spouse’s interest to the remaining spouse cleanly. The parties do not need to create ongoing title guarantees against each other.
Correcting Minor Title Defects
Title companies use quitclaim deeds to correct minor administrative defects on an existing title. These include correcting a misspelled name, an incorrect legal description, or a notary signature omission. Because the correction is ministerial rather than a new sale, no warranty is necessary.
Removing a Party From Title
A quitclaim deed can take someone off a deed quickly. This applies when removing a deceased co-owner’s name or a partner after a business arrangement changes. In refinancing situations, a quitclaim deed can remove a spouse from the title before closing to satisfy underwriting rules.
Sophisticated Real Estate Investors
Many real estate investors accept quitclaim deeds when purchasing distressed or foreclosed properties. They understand and accept the risk profile because they perform independent background research. The discounted purchase price typically reflects the added risk the buyer takes on.
When Should You Insist on a Warranty Deed?
If you buy property in a traditional, arm’s-length transaction, you should always insist on a warranty deed. In fact, conventional mortgage lenders almost universally require one. This document remains vital during a standard purchase for three distinct reasons.
First, a warranty deed provides you with immediate legal recourse if title problems emerge after closing. If you discover a hidden lien or a disputed boundary line, you can sue the grantor for damages. Without a warranty deed, you are completely on your own.
Second, lenders and title companies demand the certainty a warranty deed provides. A lender placing a mortgage needs to know the title is clean. If the deed is a quitclaim, many banks will refuse to fund the loan, or they will require significant additional underwriting.
Third, a warranty deed protects the future marketability of your asset. When you eventually sell, the next buyer’s title company will review the full history of the land.
A warranty deed makes future transactions smoother. A quitclaim deed raises immediate red flags, and red flags at closing become expensive.
Sellers prefer quitclaim deeds because they eliminate ongoing legal responsibility. Buyers want maximum protection. Your team will help you navigate this natural tension during contract negotiations. Review our guided resource on
What Is a Special Covenant Deed?
Sometimes neither a quitclaim deed nor a full warranty deed matches the goals of both parties. In those situations, real estate professionals arrange a special covenant deed. This document occupies the middle ground between the two.
A special covenant deed does not include all six of the warranties that a standard warranty deed carries. Instead, the grantor only warrants against title defects or encumbrances that arose during their specific period of ownership. The grantor makes no promises about what occurred before they acquired the title.
The grantee receives some protection, but not the unlimited warranty that extends back through the entire history of the property.
A special covenant deed commonly appears in commercial real estate, foreclosures, and institutional transfers. In these situations, the grantor holds limited knowledge of the property’s full history.
For example, a bank that acquired a property through foreclosure will offer only a covenant deed. They possess no personal knowledge of what occurred before the foreclosure action. Review our primary guide on navigating
Buyer vs. Seller Deed Preferences Across Different Scenarios
Different participants in a real estate deal naturally prefer different types of deeds based on their unique operational goals.
For standard homebuyers and grantees, the warranty deed serves as the only acceptable choice. Buyers require this document because it secures maximum legal protection and guarantees direct financial recourse against the seller if title defects emerge later.
Conversely, traditional sellers and grantors strongly prefer using a quitclaim deed. Delivering a quitclaim allows the transferring party to minimize their ongoing legal liability. This choice completely eliminates long-term title defense duties.
Lenders and mortgage companies align directly with the buyer’s preference. Conventional financial institutions mandate a full warranty deed before funding a transaction. They require this framework to clear strict underwriting rules and verify that the loan collateral remains free of competing claims.
In specific family or transitional situations, these preferences change. A divorcing spouse typically utilizes a quitclaim deed to transfer their interest to the remaining partner. This option delivers simple title removal without forcing ongoing, adversarial warranties between former spouses.
Similarly, real estate investors frequently accept quitclaim deeds if they can close a deal quickly. Investors trade title warranties for speed, provided the low purchase price offsets the underlying risk profile.
Finally, executors managing an estate or a probate transfer prefer a covenant deed or a quitclaim deed. Personal representatives lack the personal knowledge required to verify ancient land records. Using a limited warranty structure protects the estate from historical title claims that originated before the decedent owned the land.
The Hidden Risks of Using the Wrong Deed
Property disputes frequently originate from one simple mistake: using the wrong type of deed for your transaction.
Accepting a Quitclaim Deed From a Stranger
If you purchase property from an unknown seller using a quitclaim deed and a defect surfaces later, you hold zero legal recourse. You will also discover that your title insurer has added broad policy exceptions that limit your coverage. A future buyer’s lender will likely raise serious concerns about your chain of title.
Using a Quitclaim Deed With an Active Mortgage
Many lenders will not approve a loan if a recent quitclaim deed appears in the title history for a standard sale. If you accepted a quitclaim deed and now need to refinance your property, you will face significant underwriting hurdles or outright denial.
Failing to Verify Grantor Authority
Even with a warranty deed, problems arise if the person signing lacks the clear authority to convey the land. For example, if only one co-owner signs a warranty deed when the title requires two signatures, the deed may be completely unenforceable. This mistake triggers an instant title dispute. Review our guide on resolving asset documentation errors at our
Avoiding Quitclaim Deed Fraud Schemes
Fraudsters frequently utilize quitclaim deeds in real estate scams because they are so easy to execute. A scammer can quitclaim a property they do not actually own, leaving an unsuspecting buyer holding a deed to nothing.
This risk explains why title insurance remains an essential protection. To ensure your real estate documents conform to public index rules, you can review the public recording standards outlined by the
Frequently Asked Questions
What is the main difference between a quitclaim deed and a warranty deed? A warranty deed comes with six legally binding covenants that guarantee the grantor owns the property and will defend your title against future claims. A quitclaim deed offers no guarantees. The grantor simply transfers whatever interest they hold without any ongoing legal responsibility.
When should I use a quitclaim deed in Michigan? Quitclaim deeds are most appropriate when transferring property between trusted family members, removing a spouse during a divorce, correcting minor deed spelling errors, or changing title names without a cash exchange. They are not appropriate for traditional real estate sales.
Can a quitclaim deed be challenged in court? Yes. A quitclaim deed can face a court challenge if a party signed under duress, lacked mental capacity, or committed fraud. Because a quitclaim deed conveys only the grantor’s actual interest, the document can be valid but still fail to transfer clear title if prior liens exist.
Is a warranty deed required to secure a mortgage? In most cases, yes. Conventional mortgage lenders require a warranty deed as part of the closing process to ensure their loan collateral is clean and defensible. A recent quitclaim deed in an arm’s-length chain of title can cause a lender to deny financing.
What is a special covenant deed? A special covenant deed is a middle-ground option where the grantor warranties only against title defects that arose during their specific period of ownership. They make no representations about what occurred before they bought the land. This is common in estate or foreclosure sales.
What happens if an inherited property deed contains a legal error? You must correct the error before you can legally sell or refinance the property. Depending on the mistake, your team may need to file a quiet title action to clear the public records. Review our guide at
Soble Law helps clients identify where real estate and business deals break down, define the legal risk, and take control of the next step.
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About David Soble: David is a seasoned real estate and finance attorney with more than 35 years of experience, combining his background as a “big bank insider” with a commitment to demystifying complex legal issues for his clients. As the founding attorney of Soble Law (Soble PLC), he leads a specialized team in Michigan and Ohio that handles real estate transactions, contract disputes, probate, and financial litigation. Known for a practical, no-nonsense approach and peer-rated excellence (Martindale-Hubbell AV Preeminent), Soble and his team strive to protect clients’ property and financial interests with clarity, integrity, and experience.
Disclaimer: The information in this article is for general educational purposes only and does not constitute formal legal, financial, tax, real estate, finance, probate, or any other professional service or advice. Reading this content or contacting us does not establish an attorney-client relationship. Every situation is unique, and laws change frequently, so you should always consult with your own qualified attorney or professional advisor before making any decisions.
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