It is Important to understand the different types of deeds that can be used to transfer property ownership. The most common types are warranty deeds, quitclaim deeds, and release deeds. Each of these deeds has specific legal implications for both the buyer (grantee) and the seller (grantor). This article will help you understand these important legal documents, especially as you navigate the process of buying or selling real estate in Massachusetts.
What is a Warranty Deed?
A warranty deed offers the highest level of protection for buyers in Massachusetts real estate transactions. A warranty deed ensures that the seller holds clear title to the property and provides several important guarantees, called covenants.
In Massachusetts, a warranty deed provides three present covenants and one future covenant, as outlined in G.L. c. 183, § 10. When a warranty deed includes the phrase “with warranty covenants,” it ensures that the deed has the same legal effect as a long-form warranty deed. The Seller is promising to defend the Buyer’s title to the Premises. This protection is only as strong as the Seller making the covenant.
A significant feature of a warranty deed is the rule of estoppel by deed, which prevents the seller from denying the buyer’s ownership of the property, even if the seller did not have full title at the time of the sale. If the seller later acquires full title, that title automatically passes to the buyer. For instance, in Mt. Washington Coop. Bank v. Benard, 289 Mass. 498 (1935), the court ruled that any after-acquired title benefits the grantee.
What is a Quitclaim Deed?
While warranty deeds provide the most protection, quitclaim deeds are much more common in Massachusetts real estate transactions. The Massachusetts Short Forms Act made quitclaim deeds the default form of property conveyance. According to G.L. c. 183, § 2, a quitclaim deed transfers all the seller’s interest in the property, but it does not offer the same level of protection as a warranty deed. In short, a quitclaim deed only transfers whatever title the seller holds at the time of the sale.
A key Massachusetts case, Zayka v. Giambro, 32 Mass. App. Ct. 748, 753 (1992), clarified that estoppel by deed may still apply to quitclaim deeds in limited circumstances, particularly when the title claim involves the seller’s heirs. However, as the court noted in Conte v. Marine Lumber Co., Inc., 66 Mass. App. Ct. 505, 512 n.13 (2006), this rule is applied narrowly, particularly where a bona fide purchaser is involved.
For most homeowners, a quitclaim deed is a straightforward way to transfer property ownership. However, it’s important to understand that if there are any title defects, the buyer might not have recourse against the seller after the sale.
What is a Release Deed?
A release deed is less common than a warranty or quitclaim deed, but it still has a place in Massachusetts real estate law. A release deed transfers the seller’s interest to the buyer without making any promises or guarantees about the property’s title. In essence, a release deed does not include any covenants, which means the buyer takes on more risk.
A release deed is often used when the seller’s interest in the property is unclear or disputed. Massachusetts courts, such as in Stop & Shop, Inc. v. Ganem, 347 Mass. 697 (1964), have held that covenants will not be implied unless implication is clear and undoubted.
Which Deed is Right for You?
Understanding the differences between warranty deeds, quitclaim deeds, and release deeds is helpful when buying or selling a home in Massachusetts. Each type of deed carries different levels of protection for the buyer and risk for the seller. It is important to remember that while a seller who signs a warranty deed is covenanting to defend your title, that covenant is only as valuable as the seller’s ability to remedy the defect. A far more prudent strategy would be to purchase a title insurance policy for protection against defects in title.
If you’re unsure about which type of deed is appropriate for your real estate transaction, consulting with an experienced Massachusetts real estate attorney is crucial. A lawyer can ensure that your rights are protected and that you fully understand the implications of the deed used in your transaction.
