QUITCLAIMS*
TEXAS AND BEYOND
G. ROLAND LOVE
Winstead PC
500 Winstead Building
2728 N. Harwood Street
Dallas, Texas 75201
214.745.5198
[email protected]
State Bar of Texas
27TH ANNUAL
ADVANCED REAL ESTATE DRAFTING COURSE
March 10 - 11, 2016
Dallas
CHAPTER 3
* Controversy begins right here: Is it Quit Claim, Quitclaim, or Quitclaim Deed? The answer, my friend, is blowin’ in the wind,
or would that be in the mind of the writer?
G. ROLAND LOVE
Winstead PC
500 Winstead Building
2728 N. Harwood Street
Dallas, Texas 75201 (214) 745-5198
Email: [email protected]
Background
Texas A & M University, B.S., summa cum laude, 1974; College of Engineering Outstanding Senior Award;
Dept. of Electrical Engineering Bolton Award; National I.E.E.E. Outstanding Student Paper.
Southern Methodist University School of Law, J.D., 1977; Editor, Southwestern Law Journal; Thomas P.
McElroy Award, Texas Civil Practice; Texas Bar Foundation Outstanding Law Review Article.
Admitted to practice before the State of Texas; U.S. District Courts for the Northern, Southern, Eastern and
Western Districts of Texas; United States Court of Appeals for the Fifth and Eleventh Circuits; United States
Supreme Court; United States Patent & Trademark Office.
Board Certified, Commercial, Farm and Ranch, and Residential Real Estate Law by Texas Board of Legal
Specialization.
Winstead PC: Shareholder (Past Member of Board of Directors)
Community Involvement
Director, North Texas Housing Coalition; Vice President, Board of Trustees, St. Michael's School; Director,
Episcopal School of Dallas; Nation Chief, Indian Guides Program; Coach, YMCA Youth Sports Program;
Board of Directors, Park Cities YMCA; Director, The 500, Inc.; Sports Committee, Park Cities YMCA; Director
and Manager, Dallas Inter Soccer Club; Chair, YMCA Partners With Youth Sustaining Campaign; Mentor,
Dallas Volunteer Attorney Program and Lawyers for Affordable Housing; Advisory Board, Aids Interfaith
Network (AIN) (Advisory Committee); Board of Trustees, Transformance; United Way, Advocacy Committee
and Tocqueville Society.
Professional Activities
Chair Elect/Secretary: Real Estate Probate and Trust Law Section, State Bar of Texas
Fellow, American College of Real Estate Lawyers
State Bar of Texas; Dallas Bar Association (Past Chair, Legal Ethics and Law in the Schools Committees)
Certified Mediator, Dallas Bar Association
State Bar Board of Legal Specialization (Examiner)
Texas Land Title Association: Chair - Land Title Institute (15 Years); Chair, Judiciary Committee;
Chair, Title Insurance - A Primer For Lawyers; Past Chair, Defense Counsel Committee,
Legislative Committee; Director and Vice-Chair, PAC; Instructor
Sustaining Life Fellow, Texas Bar Foundation
Life Patron Fellow, Dallas Bar Foundation
Fellow, Tarrant County Bar Foundation
Fellow, College of the State Bar of Texas
Special Prosecutor, State Bar of Texas
Texas Real Estate Commission, Instructor
TexasBarCLE, Advanced Real Estate Drafting Course (Chair)
Honors And Recognition
AIN – Crystal Hope Award
American College of Real Estate Lawyers – Fellow
Dallas Inter – "Volunteer of the Year"
Texas Bar Foundation Outstanding Law Review Article Award
Texas Land Title Association: President's Award (2005, 2014); Professional Excellence Award; Peggy Hayes
Teaching Excellence Award
Texas Monthly – "Super Lawyer" Real Estate, Commercial Litigation
Quitclaims – Texas and Beyond
Chapter 3
TABLE OF CONTENTS
I.
INTRODUCTION ............................................................................................................................................. 1
II.
THE CHALLENGES OF QUITCLAIMS IN TEXAS: EVOLVING GRANT LANGUAGE, SUPREME
COURT SPIN, AND TAINTED CHAINS OF TITLE ..................................................................................... 1
III.
WHAT ARE QUITCLAIMS? RELINQUISHING A CLAIM OR RIGHT ...................................................... 2
IV.
LEGAL IMPLICATIONS ................................................................................................................................. 3
V.
WHY QUITCLAIMS? A SUGGESTED, LIMITED USE OF QUITCLAIMS ................................................ 5
VI.
OTHER STATES REACT TO THE SAME COMMON-LAW CONFUSION: PROTECTING BONA FIDE
PURCHASERS THROUGH STATUTES. ....................................................................................................... 6
A. Florida ........................................................................................................................................................ 6
B. Maine.......................................................................................................................................................... 6
C. Michigan .................................................................................................................................................... 6
D. Minnesota ................................................................................................................................................... 6
E. North Dakota .............................................................................................................................................. 6
F. Rhode Island............................................................................................................................................... 7
G. Virginia ...................................................................................................................................................... 7
H. Wyoming .................................................................................................................................................... 7
I. Case Law Interpretation ............................................................................................................................. 7
VII.
LANGUAGE TO USE AND AVOID ............................................................................................................... 7
VIII.
PROPOSED LEGISLATION ............................................................................................................................ 8
A. TX Property Code § 13.001 – A Proposal ................................................................................................. 8
IX.
CONCLUSION .................................................................................................................................................. 9
APPENDIX 1: Standard 4.40. Notice Recording System ............................................................................................ 11
APPENDIX 2: Standard 4.50. Constructive Notice..................................................................................................... 13
APPENDIX 3: Standard 4.90. Qualification as Bona Fide Purchaser ......................................................................... 17
i
Quitclaims – Texas and Beyond
Chapter 3
purchaser for a valuable consideration without
notice.
QUITCLAIMS –
TEXAS AND BEYOND
Again, the proposal was met with mostly positive
support, but was stymied by the “fear of the unknown.”
This paper provides a more in depth study of the
purposes and risks of quitclaims, the inconsistencies
with the purpose of the recording statutes, and the
manner in which other states have addressed the same
issue. Is it time to seriously consider a legislative
change to protect grantees of quitclaims from unknown
claims against title? Maybe there should be a limitations
period for challenge? Moreover, is it time to consider a
legislative change to protect subsequent grantees in a
chain of title from unknown claims against a grantor of
a quitclaim which may be a link in the chain of title?
I.
INTRODUCTION
In 1999 Representative Jim Pitts introduced House
Bill 1397 in the 76th State Legislature to modify Texas
Property Code §13.001(b) as follows:
(a) A conveyance of real property or an interest in
real property or a mortgage or deed of trust is
void as to a creditor or to a subsequent
purchaser for a valuable consideration without
notice unless the instrument has been
acknowledged, sworn to, or proved and filed
for record as required by law.
(b) The unrecorded instrument is binding on a
party to the instrument, on the party’s heirs,
and on a subsequent purchaser who does not
pay a valuable consideration or who has notice
of the instrument. A subsequent purchaser for
valuable consideration does not have notice of
an unrecorded instrument solely because the
property was conveyed to the subsequent
purchaser by a quitclaim deed.
II. THE CHALLENGES OF QUITCLAIMS IN
TEXAS: EVOLVING GRANT LANGUAGE,
SUPREME COURT SPIN, AND TAINTED
CHAINS OF TITLE
Subsequent to 1999, the courts have had a number
of occasions to address the quitclaims. In spite of Bryan
v. Thomas, a Supreme Court decision in 1963, which
softened or modified the harsh consequences of a
quitclaim for an undivided interest, 1 the 11th District
Court of Appeals in Enerlex, Inc. v. Amerada Hess, Inc.,
302 S.W.3d 351 (Tex. App. – Eastland 2009, no pet.)
found that language granting:
In support of this bill, the Office of Bill Analysis
indicated that:
“Because unsophisticated buyers commonly
use quitclaim deeds to purchase real property,
these purchasers may not suspect that they
will be unable to rely on the quitclaim deed
should a title dispute arise.”
“[A]ll right, title and interest in and to all of
the Oil, Gas, and any other classification of
valuables of substance, …, in and under and
that may be produced from the following
described lands situated in Gaines County,
State of Texas, to wit: WTTRS Survey, Block
G, Sections 160-230 inclusive”
Essentially,
“The change in law allows a purchaser to rely
upon the quitclaim deed if the purchaser acted
in good faith, paid valuable consideration for
the land, and did not have actual knowledge of
the unrecorded conveyance.”
constituted a quitclaim even though there was a
warranty included within the deed.
Common
understanding among many practitioners has been that
the use of “all” right, title, and interest, instead of “my”
right, title, and interest, would avoid the quitclaim
characterization. See White v. Dupree, 40 S.W. 962
(Tex. 1897) (an Administrator’s deed and an obvious
intent to convey title and protect the grantee). The court
rejected that distinction finding that at no point in the
deed was there a representation that the grantor actually
owned any mineral interest. Regardless of the warranty
language, the deed contained no specific representation
concerning the grantor’s title. Because the deed did not
purport to convey any specific interest, but instead
This bill did not make it out of the legislature that year,
and a couple of subsequent efforts have not fared any
better.
In 2015, an amendment to §13.001 was proposed
as follows:
(d) A grantee for valuable consideration
under a quitclaim deed may be a subsequent
land, if otherwise entitled, will be accorded the protection of
a bona fide purchaser.” Followed in Penny v. Adams, 420
S.W.2d 820 (Tex. Civ App. – Tyler 1967, writ ref’d).
1
“To remove the question from speculation and doubt, we
now hold that the grantee in a deed which purports to convey
all of the grantor’s individual interest in a particular tract of
1
Quitclaims – Texas and Beyond
Chapter 3
broadly conveyed all of the grantor’s interest - again
disregarding the “all” instead of “my” – the deed was
characterized as a quitclaim. Accordingly the grantee
could not be a bona fide purchaser and its title was
defeated by unrecorded gift deeds from an earlier time. 2
The Enerlex decision followed Rogers v. Ricane
Enterprises, Inc., 884 S.W. 2d 763 (Tex. 1994) finding
“all of the right, title and interest” of the grantor in a
specific lease “without warranty of any kind, either
expressed or implied” was “the essence of a quitclaim
deed.” In Geodyne Energy Income Prod. Partnership IEV Newton Corp., 161 S.W.3d 482 (Tex. 2005) the
Supreme Court also found “all of Assignor’s right, title
and interest” in a specific lease to be a quitclaim.
Moreover, as per Clark v. Gauntt, 138 Tex. 558, 161
S.W.2d 270 (Tex. 1942), the covenant of general
warranty only extended to what was granted or
purported to be granted. Thus, it became even more
unclear and a question of subjective determination as to
the intent of the grantor, whether or not a specific
interest in property was identified. 3
More recently an examination of large commercial
transactions in Dallas and Harris Counties revealed the
following language regularly being used in deeds and
security agreements:
•
•
•
•
Maybe the problem is not just one for the
unsophisticated anymore.
III. WHAT ARE QUITCLAIMS?
RELINQUISHING A CLAIM OR RIGHT
To understand the nature and proper use of
quitclaims it is important to briefly discuss its
etymology. The origin of the word "quitclaim" goes
back to circa 1300 and possibly earlier. It is AngloFrench and means "relinquishing of a legal right or
claim." 4
Quitclaim refers to particular language involving
giving up a claim or right by the person that uses it.
When the language was used in land transactions during
the Middle Ages, it was generally used to secure
transactions already occurring between parties, but a
document with quitclaim language could also be used
on its own to convey land. When used as a conveyance,
two actions occurred:
Grant, bargain, sell, convey, transfer, assign, and
set over “all right, title, and interest of grantor,
whether now owned or hereafter arising”
Give, grant, bargain, sell, pledge, assign, warrant,
transfer, and convey, “all estate right, title, and
interest which the Project Company now has or
may hereafter acquire”
Grantor hereby gives, grants, bargains, sells,
conveys, and confirms “all of the grantor’s estate,
right, title and interest, whether now owned or
hereafter acquired.”
1)
2)
the land was conveyed through appropriate
language; and
the seller added additional security by using
the quitclaim.
The seller, and often his heirs, would execute a
document including quitclaim language to protect the
buyer from certain persons, as indicated by the language
used, who might potentially bring a claim against the
new owner after the transfer. The language was also
used to protect the buyer, not remove liability from the
seller, as whole documents labeled “quitclaim” are often
used today. 5
“Quitclaim” was also used to relinquish a right or a
claim provided by a treaty. The term “quitclaim” did
not refer to any particular legal document – and labeling
a document as such merely reflected the fact that
quitclaim language was used. For example, in 1189 the
Mineral transactions in the shale production counties
include:
•
•
•
properties located in ________ County, including,
but not limited to . . . .”
“It is not the intent of Grantor to cloud title to any
lands described on Exhibit A in which Grantor does
not own an interest, but it is the intent to grant and
convey any interest Grantor owns, whether or not
correctly or fully described.”
“all of Grantor’s undivided interest in and to . . . .“
“all of Grantor’s interest in and to . . . .“
“all of Grantor’s interest in and to . . . and all oil,
gas and other minerals located in, upon or under
2
4
For total confusion, see Cook v. Smith, 174 S.W. 1094 (Tex.
1915), in which the court noted “all my right, title and
interest” would be a quitclaim, but for the additional phrase
“and it is my intention to convey . . . all the real estate that I
own in said town . . ., whether it is set out above or not,” which
made it a conveyance.
quitclaim. Dictionary.com. Online Etymology Dictionary.
Douglas
Harper,
Historian.
(Available
at
http://dictionary.reference.com/browse/quitclaim, accessed:
January 20, 2016).
5
Quitclaim. The University of Nottingham Manuscripts and
Special
Collections.
(Available
at
https://www.nottingham.ac.uk/manuscriptsandspecialcollecti
ons/researchguidance/deedsindepth/freehold/quitclaim.aspx,
accessed: January 21, 2016).
3
See Orca Assets, G.P. v. Burlington Res. Oil & Gas Co.,
L.P., 464 S.W.3d 403 (Tex. Civ. App. – Corpus Christi 2015).
2
Quitclaims – Texas and Beyond
Chapter 3
"Quit Claim of Canterbury" was issued by Richard I of
England to relinquish the terms of the Treaty of Falaise,
which subjected Scotland to English rule and subjection.
Richard, who needed to fund the Third Crusade, issued
the quitclaim in exchange for money. In effect, Richard
gave up any right to feudal superiority over William the
Lion of Scotland. 6 Again, the use of quitclaim here
indicates that a quitclaim simply refers to the language
regarding relinquishing a claim. When one refers to an
instrument as a quitclaim, this merely states that the
instrument includes quitclaim language, and it may or
may not include language effectuating other legal
actions.
In yet another famous historical transaction, a
quitclaim found a useful purpose. In 1597 William
Shakespeare purchased New Place in the town of
Stratford-upon-Avon from William Underhill. William
Underhill died shortly after the sale, apparently
poisoned by his eldest son Fulke. He was prosecuted for
the crime and hanged two years later. Fulke’s estate
reverted to the Crown until a younger brother, Hercules,
who was a minor, became of legal age in 1602. At that
time, William Shakespeare reached agreement with
Hercules to quitclaim the property to William
Shakespeare. The documentation recited that Hercules
had:
conveyance of the property itself. For a quitclaim to
also be a conveyance, the passing of title must also be
shown, and such passing of title cannot rely merely on
the relinquishment of “rights” or interests.” See Rogers
v. Ricane Enterprises, 884 SW2d 763, 769 (Tex. 1994).
Even if the instrument calls itself a “quitclaim,” what
matters is whether the document focuses on transferring
the land itself rather than the grantor’s right or title,
which should be determined by the intent of the parties.
See Cook v. Smith, 174 SW 1094 (Tex. 1915); Benton
Land Co v. Jopling, 300 SW 28 (TX Comm’n App
1927); FJ Harrison & Co v. Boring & Kennard, 44 TX
255 (Tex. 1875). Intent should be determined within the
four-corners of document. Cook v. Smith, 174 SW 1094
(Tex. 1915). In fact, Texas courts have repeatedly
interpreted deeds not to be quitclaims deeds whenever
the document indicates the parties’ intention to actually
convey interest in land. 7
The recording statutes are not found in the common
law. 8 Transfers of property depended largely on the
document of title itself, and often at a ruling party’s
discretion. The states began to adopt recording statutes
to protect bona fide purchasers, create a registry of sorts,
and allow for some certainty of title. 9 Thus the purposes
of various recording statutes are to protect those who
purchase real property in good faith against unknown
claims against the property and to promote the stability
of land titles. These purposes are attempted by race,
race-notice and notice statutory schemes. Texas has
adopted the notice approach. 10 To effectuate this
purpose, the focus is on whether or not claims are known
by the purchaser, whether by actual or constructive
notice.
The Texas recording statute is codified in
Section 13.001 of the Texas Property Code. It states:
“remised and quitclaimed for himself and his
heirs to the aforesaid William and his heirs in
perpetuity.”
It further indicated as consideration:
“And for this recognition, remission,
quitclaim, warranty, find, and agreement, the
same William has given to the aforesaid
Hercules 60 pounds sterling.”
(a) A conveyance of real property or an interest
in real property or a mortgage or deed of
trust is void as to a creditor or to a
subsequent purchaser for a valuable
consideration without notice unless the
instrument has been acknowledged, sworn
This is an obvious and appropriate use of a quitclaim.
IV. LEGAL IMPLICATIONS
When a grantor uses a quitclaim, he conveys his
current “right, title, and interest” to property to the
grantee. Without more, there may not be an actual
6
8
See G. Snell III and H. Gibson. The Perils of Quitclaims.
Oil, Gas & Mineral Title Examination Course. The State Bar
of Texas, June 25, 2015, for an excellent general discussion
and background.
JOHN CANNON. "Canterbury, quitclaim of." The Oxford
Companion to British History. 2002. Encyclopedia.com. 20
Jan.
2016
(available
at
http://www.encyclopedia.com/doc/10110Canterburyquitclaimof.html)
9
See Texas Title Examination Standard 4.40. Notice
Recording System. Common Law Background. Standard 4.40
is attached as Appendix A.
7
It has been suggested that this disregard of the term
“quitclaim” or “all of grantor’s right, title, and interest” is
unique to Texas. Many Texas courts have strained to find a
deed to avoid the harsh consequences of a quitclaim. See
Annotation, Grantee or Mortgagee by Quitclaim Deed or
Mortgage in Quitclaim Form as Within Protection of
Recording Laws, 59 ALR 632, 648-49 (1929 (Supp. 2009)).
10
See Texas Title Examination Standard 4.40, supra, at Types
of Recording Statutes and How a Notice Recordation Statute
Operates.
3
Quitclaims – Texas and Beyond
Chapter 3
to, or proved and filed for record as required
by law.
(b)
Rather than making the question of notice at least a
factual determination based on the circumstances and
the language used in the deed, the Court created a
blanket rule where quitclaims trigger a sort of implied
negative notice – that a quitclaim suggests the grantor of
the quitclaim had their own doubts on the status of his,
her, or its title. A blanket, conclusory rule relying on
assumption runs counter to the presumption created by
the recording statute. As the Court notes in Richardson
v. Levi, it is the intent shown by the instrument’s
language that should matter most regarding a
conveyance. A “quitclaim” is a phrase, and it can be
language used to add security to title in a conveyance.
The damage the Court’s rule does to a chain of title is
long lasting – not only does the quitclaim affect the
grantee’s status as a bona fide purchaser, but all
purchasers subsequent to the recipient of a quitclaim
will be subject to the presumed outstanding interests or
defects (Houston Oil Company v. Niles, 255 SW 604,
609-11 (TX Comm’n App 1923). Therefore, any title
dependent on a quitclaim as a link in the chain of title
cannot be marketable because it might, theoretically
based on the court’s blanket rule, be defeated by some
unknown claimant. It cannot be cured because of the
passage of time or its unknown source. See Texas Title
Examination Standard 4.90. Qualification as Bona Fide
Purchaser. Quitclaim Deed. 12
The rationale for the perspective of the Texas
courts is that the grantee of a quitclaim only takes as
much title as the grantor had at the time of conveyance,
so the grantee will take subject to any outstanding
interest at that time (regardless of whether the grantee
knows about it or not). In other words, the purchaser of
property with a quitclaim in the chain of title is only
acquiring the “chance of title,” and this mere chance,
and the conclusory assumption that use of a quitclaim
indicates doubt and puts the grantee on notice of such
doubt, means the transaction cannot be made in good
faith, thereby removing bona fide purchaser protection.
Additionally, because the purchaser takes only what the
grantor has, the purchaser is free of the equities of the
grantor but not of others. 13
It should also be noted that the doctrine of afteracquired title will not protect the grantee because the
title or right that is later acquired by the grantor was not
held by the grantor at the time the grantor gave the
grantee the quitclaim. Leopold, Texas Practice, Vol. 5 at
§31.9 (2005). This is true even if there is a covenant of
warranty. See Harrison & Co. v. Boring & Kenard, 44
Tex. 255 (Tex. 1875); Breen v. Morehead, 136
S.W.1047 (Tex. 1911) (estoppel arising from warranty
The unrecorded instrument is binding
on a party to the instrument, on the
party's heirs, and on a subsequent
purchaser who does not pay a valuable
consideration or who has notice of the
instrument.
Therefore, for a bona fide purchaser to be protected
by the recording statute, there must be the
following:
(i) A conveyance;
(ii) Valuable consideration;
(iii) No actual or constructive notice of a
claim on or against the property
conveyed.
So if the grantee has any kind of notice (actual or
constructive) regarding any defect or outstanding
interest on the land he acquires, or does not pay
good value for it, then the grantee is not protected
as a bona fide purchaser. Recording creates
constructive notice. See Tex. Prop. Code Section
13.002(1). See also Texas Title Examination
Standard 4.50. Constructive Notice. 11
In Texas, according to Threadgill v. Bickerstaff, 29
S.W. 757 (Tex. 1895), the grantee of a quitclaim deed
cannot qualify as a bona fide purchaser for value against
unrecorded instruments and equities that existed at the
time of the quitclaim. This is because the Texas courts
have interjected doubt to a chain of title including a
quitclaim in every circumstance by suggesting a
quitclaim automatically puts the grantee on notice of a
claim on or against the property conveyed, whether or
not there actually should be any doubt and whether or
not there actually is a claim on or against the property
conveyed. In Richardson v. Levi, 3 S.W. 444 (Tex.
1887) the Texas Supreme Court stated:
A party receiving a quitclaim deed to land
cannot be deemed a bona fide purchaser
without notice of any interest adverse to his
grantor. Such a conveyance indicates by its
very form that the grantor has doubts of his
title, and the grantee takes with notice that he
is getting a dubious title, and is put upon
inquiry as to the claim which casts doubt upon
it.
11
Standard 4.50 is attached as Appendix B.
12
Standard 4.90 is attached as Appendix C.
13
Standard 4.90. See also Baldwin v. Drew, 180 S.W. 614
(Tex. Civ. App. - Beaumont 1915) pointing that even if
“grant, sell, and convey” language is used in a quitclaim, there
are no statutorily implied covenants.
4
Quitclaims – Texas and Beyond
Chapter 3
not applicable); and Simon v. Stearns, 43 S.W. 50 (Tex.
Civ. App. - writ refused) (could subsequently acquire
property subject to earlier quit claim). 14
As noted, in 1963, the Texas Supreme Court
attempted to retract its blanket rule hindering a grantee’s
status as a bona fide purchaser in Bryan v. Thomas, 365
SW2d 628 (TX 1963), by holding:
A quitclaim deed to an owner redeeming
property under this section is not notice of an
unrecorded instrument. The grantee of a
quitclaim deed and a successor or assign of the
grantee may be a bona fide purchaser in good
faith for value under recording laws.
The statute is a direct contradiction to the implied notice
of “dubious title” the Texas Courts state a quitclaim
must raise. The Property Tax Code has taken direct
steps to address warranty concerns while protecting the
redeeming party.
Likewise, Tex. Civ. Prac. & Rem. Code §34.045(a)
provides for:
“the grantee in a deed which purports to
convey all of the grantor’s undivided interest
in a particular tract of land, if otherwise
entitled, will be accorded the protection of a
bona fide purchaser.”
However, subsequent cases have ignored the holding
and reverted back to the problematic presumption of
notice of defective title created by existence of a
quitclaim in the chain.
As discussed in most cases, it should be the intent
of the parties based on the document as a whole that
matters. Many deeds labeled as “quitclaims” may do
much more than just grant the grantor’s rights, interests,
and title – they may also pass ownership to the property.
Mere existence of an unadjudicated document labeled a
“quitclaim” does not, in reality, mean the purchaser is
not a bona fide purchaser.
The only parties that benefit from the Texas
perspective on a quitclaim’s effect on the chain of title
and bona fide purchasers are those that hold an
unrecorded and unknown interest. These are the parties
that have the most knowledge and are in the best
position to protect themselves and create notice. The
protected parties should be both
1)
2)
When the sale has been made and its terms
complied with, the officer shall execute and
deliver to the purchaser a conveyance of all
the right, title, interest, and claim that the
defendant in execution had in the property
sold.
Section 34.046 states:
The purchaser of property sold under
execution is considered to be an innocent
purchaser without notice if the purchaser
would have been considered an innocent
purchaser without notice had the sale been
made voluntarily and in person by the
defendant.
But even then the Courts confuse the statute with the
basic quit claim premise. Compare Burleson City v.
G.E. Capital Corp., 831 S.W.2d 54 (Tex. App. –
Houston [14th Dist.] 1992, writ denied) (following
statute) with Apex Fin. Corp. v. Garza, 155 S.W.3rd 230
(Tex. App. – Dallas 2004, pet. denied) (Sheriff’s sale is
in the nature of a quitclaim).
those people that assert their rights to the
property and ensure others potentially affected
by their interests further down the chain are
informed, and
grantees of property that pay value for that
property and conduct the appropriate due
diligence as to the state of its title.
V. WHY QUITCLAIMS? A SUGGESTED,
LIMITED USE OF QUITCLAIMS
Although “quitclaim” should refer to language
used rather than an instrument as a whole, a quitclaim as
an instrument may be appropriate when the recipient of
the quitclaim instrument requests or requires additional
protection or security from the grantor, and the concern
focuses on giving up future rights between the known
and present parties. This might arise between family
members (giving up some sort of hereditary claim); in
This was less of an issue more than a century ago when
general warranty deeds were the norm. It is very much
an issue as the usage of “all right, title and interest”
grows into common practice for real estate transactions.
Even the Texas Property Tax Code has gone further
to recognize that a grantee under a quitclaim can rely on
the recording statutes.
Regarding the right to
redemption codified at Texas Tax Code § 34.21,
subsection (j) states:
App. – San Antonio 1917). The Corpus Christi Court of
Appeals held the opposite in Johnson v. McClintock, 202
S.W.3d 821 (Tex. Civ. App. – Corpus Christi 2006).. Cf. An
ineffective warranty deed can provide color of title.
Rosborough v. Cook, et al, 194 S.W. 131 (Tex. 1917).
14
A quit claim can pass title, however, if the granter had the
title to give. Thus a quit claim can support a 5 year limitations
defense if the grantee can demonstrate the grantor had the title
to give. Barksdale v. Benskin, et al, 194 S.W. 402 (Tex. Civ.
5
Quitclaims – Texas and Beyond
Chapter 3
be bona fide purchasers without notice within
the meaning of the recording acts.”
divorce to terminate a portion of joint ownership (giving
up a claim in joint tenancy); from an individual into a
business entity (generally to protect assets under a
protected entity); between countries or governments
(where one country or government promises it will not
reinitiate any dispute based on former beliefs that a
certain right was held); in oil grants or grants between
counties or states (where large tracts of land or rights in
land need to be transferred but adequate records do not
exist); or in a government auction (government never
claimed ownership in the land but is merely acting as the
medium in a tax sale). A quitclaim gives up a right, or
a claim to title, or a possible interest. It does not convey
the actual property. One must distinguish between title
and the property itself.
Quitclaim language should be used to protect the
recipient from future claims made by the former owner
and those with relationships or in privity with the former
owner. Quitclaim language can be used to secure title,
but the language should not to be used to pass title on its
own. Other language should be used to effect the actual
transfer in ownership. If it is the intent of the parties that
controls when reviewing deeds, then the courts must
consider all of the language and actions taken within the
four corners of the document, and should not hold
quitclaim language against possibly clear title. With
that in mind, declaring that the existence of a quitclaim
in a chain of title automatically causes doubt on that
chain of title, thereby preventing subsequent purchasers
from having good faith and being bona fide purchasers,
as the Texas courts have done, is an unsubstantiated
generalization and a blanket rule without any real
foundation.
The Florida statute makes the classification mandatory
by using “shall,” thereby removing the uncertainty and
subjectivity that might generally cause the matter to
need determination by the court.
B.
Maine
Maine, in 33 M.R.S. § 201 (2013), states:
“Conveyances of the right, title or interest of
the grantor,”
which is quitclaim language:
“if duly recorded, shall be as effectual against
prior unrecorded conveyances, as if they
purported to convey and actual title.”
Again, the classification is mandatory.
C. Michigan
Michigan, in MCLS § 565.29 (2014), states:
“The fact that such first recorded conveyance
is in the form or contains the terms of a deed
of quit-claim and release shall not affect the
question of good faith of such subsequent
purchaser, or be of itself notice to him of any
unrecorded conveyance of the same real estate
or any part thereof.”
D. Minnesota
Similar to Michigan, Minnesota, in Minnesota
Statutes § 507.34 (2014) states:
VI. OTHER STATES REACT TO THE SAME
COMMON-LAW CONFUSION:
PROTECTING BONA FIDE PURCHASERS
THROUGH STATUTES.
Recognizing the purpose of recording statutes and
in an attempt to clear any air of confusion generated by
the courts regarding how the existence of a quitclaim
deed in a chain of title might affect the notice and good
faith of a purchaser, many states have taken statutory
action. States recognizing that existence of a quitclaim
in a chain of title should not automatically remove a
subsequent purchaser’s chance to be a bona fide
purchaser are the majority. Texas is a very rare
minority, if not all alone.
Below are a selected group of examples where
states have reviewed the purpose of recording statutes
and sought to protect the status of bona fide purchasers.
“The fact that such first recorded conveyance
is in the form, or contains the terms of a deed
of quitclaim and release shall not affect the
question of good faith of such subsequent
purchaser or be of itself notice to the
subsequent purchaser of any unrecorded
conveyance of the same real estate or any part
thereof.”
E.
North Dakota
North Dakota in N.D. Cent. Code § 47-19-41
(2013) states:
“An unrecorded conveyance of real estate is
void as against any subsequent purchaser in
good faith, and for valuable consideration, of
the same real estate or any part of the same
real estate, regardless of whether recorded in
the form of a warranty deed or deed of
quitclaim.”
A. Florida
Florida Statute § 695.01(2) (2013) states:
“Grantees by quitclaim, heretofore or
hereafter made, shall be deemed and held to
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which, if followed up, would lead to a
knowledge of such outstanding conveyance or
equity, he is entitled to the protection as a bona
fide purchaser, upon showing that the
consideration stipulated has been paid and that
such consideration was a fair price for the
claim or interest designated.”
Additionally:
“The fact that the first recorded conveyance is
a quitclaim deed does not affect the question
of good faith of the subsequent purchaser, or
be of itself notice of any unrecorded
conveyance of the same real estate or any part
of the same real estate.”
Georgia adopted the same perspective in Archer v.
Kelly, 194 Ga. 117, 21 S.E.2d 51 (GA 1997). Likewise
North Carolina adopted a recording statute, and in
Hayes v. Ricard, 97 S.E.2d 105 (N.C. 1957) stated:
F.
Rhode Island
Rhode Island took a direct attack to declare
quitclaim deeds the same as a deed with implied
warranties. See R.I. Gen Law §34-11-17.
“A subsequently dated but prior recorded
deed, including a quitclaim deed supported by
consideration, takes precedence over a prior
dated but subsequently recorded fee simple
deed.”
G. Virginia
Virginia in Virginia Code § 55-96 (2014) states:
“The fact that any such instrument is in the
form of or contains the terms of a quit-claim
or release shall not prevent the grantee therein
from being a purchaser for valuable
consideration without notice, nor be of itself
notice to such grantee of any unrecorded
conveyance of or encumbrance upon such real
estate goods and chattels.”
In New Mexico, echoing an approach taken by Illinois
and California, the court in Mabie-Lowry Hardware Co.
v. Ross et al., 189 P.42 (NM 1920) stated:
“Nor should the fact that a purchaser accepts
a quitclaim be regarded, in our judgment, as a
‘significant circumstance,’ in charging him
with notice of a prior or paramount title. [The
grantee] very properly says with reference to
this suggestion: ‘But there would appear to be
equal reason for the opposite argument, that a
deed with general warranty was as significant
a circumstance – that, unless there had been
something wrong about the title, the purchaser
would not have demanded a general covenant,
and that he intended to run the risk of the
defect, and rely upon the covenant for his
protection.”
H. Wyoming
Like Rhode Island, Wyoming declared a quitclaim
to be equivalent to a deed to pass title:
“A deed of quitclaim and release shall be
sufficient to pass all the estate which the
grantor could lawfully convey by deed of
bargain and sale.”
Wyo. Stat. §34-1-107.
I.
Case Law Interpretation
Other states have resorted to the courts to provide
bona fide purchasers protection and certainty to chains
of title.
In Moelle v. Sherwood, 148 US 21 (13 Sup. Ct. 426,
37 L. Ed. 350) (1893), the Court addressed a case on
appeal from the district court of Nebraska. The
Nebraska recording statute provided that deeds should
take effect and be enforced from the time of delivery to
the register of deeds for record, and not before, as to all
creditors and subsequent purchasers in good faith
without notice. A quitclaim was used, and it granted the
grantor’s “right, title, and interest in and to” the
property. Regarding how a quitclaim should affect
one’s status as a bona fide purchaser, the court stated:
The court continued:
“The theory of the registry laws is that the
records truly disclose the state of every title.
If an intending purchaser, after a careful
examination of the record, finds the legal title
lodged in his grantor, and has no actual notice
of any outstanding claim, and obtains all his
grantor’s interest, why should his right to
precedence over a prior unrecorded
conveyance of which he had no notice depend
upon the form of his deed?”
VII.
LANGUAGE TO USE AND AVOID
First, do not label a deed a “quitclaim,” unless
intended. The label itself means very little with regard
to the intent of the parties when compared to the other
legally effective language of the document, but why ask
for trouble?
Identifying a specific estate being
“If the grantee takes the deed without notice
of such outstanding conveyance or obligation
respecting the property, or notice of facts
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Grantee the Property, together with all and
singular the rights and appurtenances
thereto in any way belonging, to have and
to hold it to Grantee and Grantee's heirs,
successors, and assigns forever. Grantor
binds Grantor and Grantor's heirs and
successors to warrant and forever defend
all and singular the Property to Grantee
and Grantee's heirs, successors, and
assigns against every person whomsoever
lawfully claiming or to claim the same or
any part thereof, except as to the
Reservations from Conveyance and the
Exceptions to Conveyance and Warranty.
conveyed operates against a quitclaim characterization.
If the issue is avoiding warranty liability, a deed without
warranty should be used.
The more information, the better. Do you want
to just give a release of a future right? Or are you trying
to transfer the land? Then use the language for transfer
and refer to the particular land. Refer to it as your land.
Possibly, if there is a desire to assure every interest of
the Grantor is being conveyed, use a dual conveyance of
a specific interest and a second separate part conveying
all of Grantor’s undivided right, title, and interest in the
property, to the extent not already conveyed. A similar
option, after the granting language for the Property,
might be:
It is the intent of Grantor to grant, sell and
convey his entire interest in the Property,
including, but not limited to, all of his
right, title and interest, whatever it may be,
such that Grantor does not retain any
interest in the Property and the entirety of
his interest is vested in the Grantee.
VIII.
PROPOSED LEGISLATION
The following proposed legislation attempts to
address the negative implied notice placed on a grantee
by a quitclaim through the court’s blanket rule evoking
dubiousness. It is similar to Michigan’s statutory
language, which directly addresses how the mere use of
a quitclaim, without more, will not affect the good faith
or notice of a subsequent grantee in a chain of title. The
proposed statute would not only achieve the purpose for
which recording statutes are passed – to protect bona
fide purchasers - but would also add much needed legal
certainty and objectivity to a chain of title analysis.
Furthermore, any proposal should avoid use of “may” or
language indicating permissible classification, as doing
so does not provide any additional legal certainty. The
default rule must be that the existence of a quitclaim
deed in a chain of title does not affect one’s status as a
bona fide purchaser, and it should be the burden of the
party so claiming that it should to prove otherwise.
Likewise, to address the courts’ repeated instruction to
discern the parties’ intention, one might add when
appropriate:
Notwithstanding that this deed does not
specifically state the interest of Grantor
conveyed hereby, this instrument is not
intended, and shall not be construed, as a
mere quitclaim, reference being made to
the public records for a complete
description of Grantor’s interest.
The State Bar forms adequately address the distinctions.
The Quitclaim simply uses the term “QUITCLAIM”
and states:
A.
TX Property Code § 13.001 – A Proposal
(d) A prior recorded conveyance or
transfer in a chain of title in the form of or
containing the terms of a deed of quitclaim and release shall not affect the
question of good faith of a subsequent
purchaser, or be itself notice to such
subsequent purchaser of any unrecorded
conveyance
of,
transfer
of,
or
encumbrance on the same real estate or any
part thereof.
TO HAVE AND TO HOLD all of
Grantor’s right, title and interest in and to
the above described property and premises
unto the Grantee, and Grantee’s heirs,
administrators, executors, successors
and/or assigns forever. Neither Grantor
nor Grantor’s heirs, administrators,
executors, successors and/or assigns will
have, claim or demand any right or title to
the aforesaid property, premises or
appurtenances or any part thereof.
The General Warranty Deed likewise is straight
forward, stating:
(based on Michigan, MCLS § 565.29, 2014).
An alternative would be a simple adoption of the
language of Texas Tax Code §34.21:
(d) A quitclaim deed is not notice of an
unrecorded instrument or claim. The grantee
of a quitclaim deed and a successor or assign
of the grantee may be a bona fide purchaser in
good faith for value under recording laws.
Grantor, for the Consideration and subject
to the Reservations from Conveyance and
the Exceptions to Conveyance and
Warranty, grants, sells, and conveys to
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IX. CONCLUSION
Currently, Texas title examiners focus on the intent
of the parties by reading and interpreting the language
in the deed, but where interpretation is invited also
comes some degree of subjectivity and uncertainty.
This subjectivity and uncertainty leads to court cases
involving the issue of whether or not a deed, which
includes quitclaim language or labels itself as a
“quitclaim,” is more than just a quitclaim and functions
as an actual deed. Or worse, is an intended conveyance
just a quitclaim? The issue needs to be able to be
resolved outside of the courts, and can be done so
through a statute, thereby providing much more
objectivity and certainty to any title determination;
removing liability from title examiners or those
determining the status of title; providing individuals that
ought to be afforded bona fide purchaser protection with
that protection, and also reducing the costs and time
associated with adjudicating an unclear document or
situation. A lay person, or even an attorney uninformed
as to the “magic” of certain words, might reasonably
believe a transfer of all my rights, title and interest to a
piece of property would benefit from bona fide party
protection. An unintended loss of rights should not
result from the improper use of arcane and confusing
words of art.
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APPENDIX 1
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APPENDIX 2
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APPENDIX 3
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