Posted on: 06th Aug, 2008 02:35 pm
If an owner dies during construction of a home and a quitclaim deed is signed, what happens? My son is building a home on a lot which he owns. The builder wants him to sign a quitclaim deed before starting. Is this a good idea?
welcome cherde,
I suppose it's not a good idea because the construction isn't complete. But has the builder stated why he wants the deed?
I suppose it's not a good idea because the construction isn't complete. But has the builder stated why he wants the deed?
No, do not sign a quitclaim deed to the builder.
If the builder is worried about getting paid, work out a payment schedule where he gets paid for incremental completion of work.
Most states also allow a builder to put a mechanic's lien on constructed property in the event of non-payment.
To answer your original question, giving a person a quitclaim deed gives them title to the house. If you then die, they still have title. If you live, they still have title. I have done much construction work, and no one gives title to a builder as security for payment.
In fact, it is usually the opposite. Owners require a contractor to obtain a "performance bond" to guarantee completion of the construction work.
If the builder is worried about getting paid, work out a payment schedule where he gets paid for incremental completion of work.
Most states also allow a builder to put a mechanic's lien on constructed property in the event of non-payment.
To answer your original question, giving a person a quitclaim deed gives them title to the house. If you then die, they still have title. If you live, they still have title. I have done much construction work, and no one gives title to a builder as security for payment.
In fact, it is usually the opposite. Owners require a contractor to obtain a "performance bond" to guarantee completion of the construction work.
