Posted on: 09th Jan, 2012 08:27 am
Hi,
I've got a piece of vacant land that is free and clear. My desire is to use the land as collateral to obtain a short term loan through a friend. The concern (by the person lending the money) is that they don't actually own the land via quitclaim deed. How do I express that the quitclaim deed is legit and valid and ONLY if there were liens on the property would this be an issue and a need for a warranty deed. I have suggested that a title search should put him at ease. This is the paragraph that he's citing which has created some confustion...
Unlike most other property deeds, a quitclaim deed contains no title covenant and thus, offers the grantee no warranty as to the status of the property title; the grantee is entitled only to whatever interest the grantor actually possesses at the time the transfer occurs. This means that the grantor does not guarantee that he actually owns the property at the time of the transfer, or if he does own it, that the title is free and clear. It is therefore possible for a grantee to receive no actual interest, and – because a quitclaim deed offers no warranty – have no legal recourse to recover their losses.
Thank you
I've got a piece of vacant land that is free and clear. My desire is to use the land as collateral to obtain a short term loan through a friend. The concern (by the person lending the money) is that they don't actually own the land via quitclaim deed. How do I express that the quitclaim deed is legit and valid and ONLY if there were liens on the property would this be an issue and a need for a warranty deed. I have suggested that a title search should put him at ease. This is the paragraph that he's citing which has created some confustion...
Unlike most other property deeds, a quitclaim deed contains no title covenant and thus, offers the grantee no warranty as to the status of the property title; the grantee is entitled only to whatever interest the grantor actually possesses at the time the transfer occurs. This means that the grantor does not guarantee that he actually owns the property at the time of the transfer, or if he does own it, that the title is free and clear. It is therefore possible for a grantee to receive no actual interest, and – because a quitclaim deed offers no warranty – have no legal recourse to recover their losses.
Thank you
Hi Deborah!
Welcome to forums!
It is true what your friend is saying. As the property is free and clear, you can contact an attorney and get a warranty deed drafted from him. A warranty deed may be used to get the property transferred to your friend.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It is true what your friend is saying. As the property is free and clear, you can contact an attorney and get a warranty deed drafted from him. A warranty deed may be used to get the property transferred to your friend.
Feel free to ask if you've further queries.
Sussane
Hello Deborah,
It's called Step up in Basis. Look into what this is going to mean before you transfer ownership.
:idea:
It's called Step up in Basis. Look into what this is going to mean before you transfer ownership.
:idea:
