TAKING TITLE GARRETT SUTTON
The second reason a quit claim deed is not preferred is because the quit claim deed severs an express or
implied warranty of title. (Remember, you are just granting whatever you may own which may be something,
or nothing.) As such, the title insurance doesn’t follow. While this may not seem like a big deal, let’s consider
an example.
You buy a property in your name. Part of your closing costs includes a policy of title insurance. Several years
later you want to transfer title to an LLC for asset protection. Your friend says a quit claim deed is the easiest
and quickest way to go. You file the quit claim deed and now the property is titled in the name of your LLC.
Later, you learn that the boundaries weren’t properly surveyed. You seek recourse from the title company
since they insured the boundaries were correct. But you now learn that by quit claiming the property into your
LLC you have unwittingly cancelled your title insurance policy. The boundary issue is no longer insured.
The way to avoid this problem is to use a grant deed or a warranty deed. A title insurance policy isn’t
extinguished in such a transfer. As well, a grant deed is just as easy to prepare as is a quit claim deed. But in
either case, remember that easy isn’t always best. If you are not an expert at title transfers, I would have a
lawyer or title company handle them.
For more information on this and other title matters, please read my book Loopholes of Real Estate or visit
CorporateDirect.com
Garrett Sutton
Garrett Sutton is an attorney, speaker and best selling author. As part of Robert Kiyosaki’s Rich
Dad’s Advisor group he has written six books which have been translated into 11 languages.
Garrett focuses on corporate and asset protection law and speaks to audiences on the
importance of asset protection. His advice is pertinent, timely and valuable.
Garrett received his Juris Doctor Law Degree in 1978 from Hastings College of the Law, the
University of California’s law school in San Francisco. He received a B.S. in Business
Administration from the University of California, Berkeley, in 1975. He is licensed to practice in
Nevada and California.
Website: http://www.corporatedirect.com/