Imagine you buy a small rental house, collect rent for six months, and then a letter arrives: a contractor filed a $18,000 mechanic's lien against the property two owners ago, it was never paid, and it is still attached to your house. Whether you can send that bill back to the person who sold you the property was decided on closing day — not by the price you negotiated, but by the kind of deed you accepted. A warranty deed gives you promises you can sue on. A quitclaim deed gives you whatever the seller happened to own, liens included, with no promises at all.
Every deed transfers ownership, but deeds differ enormously in what the seller guarantees about the title behind that ownership. This guide explains exactly what each deed type promises, the six covenants of title behind a general warranty deed, the middle ground of a special warranty deed, when a quitclaim is genuinely the right tool, and why no mortgage lender will fund a purchase closed with one.
The One-Sentence Difference
A warranty deed says: "I own this property, I have the right to sell it, the title is clean except for what I listed, and if that turns out to be wrong, you can come after me." A quitclaim deed says: "Whatever interest I have in this property — if I have any at all — is now yours. I promise nothing about it."
Both instruments transfer title effectively when the underlying title is good. The difference is entirely about risk: who bears the cost if the title turns out to be defective. With a warranty deed, the seller retains liability for title problems. With a quitclaim deed, the buyer absorbs every defect, lien, and competing claim sight unseen.
What a Quitclaim Deed Actually Transfers
A quitclaim deed — sometimes called a deed of release — conveys only the interest, if any, that the grantor holds at the moment of transfer. Read that qualifier literally: if the grantor owns the property free and clear, you receive it free and clear. If the grantor owns a one-third share as a tenant in common, you receive that one-third share. If the grantor owns nothing at all, you receive nothing at all, and you have no claim against the grantor for the disappointment.
The deed contains no covenants of title: no assertion that the grantor owns the property, no assertion of a right to sell it, no statement about liens or encumbrances, and no obligation to defend your title if someone else claims the property later. The granting language itself is minimal — typically "conveys and quitclaims" or "remises, releases, and quitclaims" — and it deliberately stops short of any verb like "warrants" that would create liability.
That sounds alarming, and in the wrong transaction it is. But the absence of warranties is also what makes a quitclaim deed cheap, fast, and final: there is nothing to negotiate, no title search the deed itself requires, and no lingering liability for the person signing it. The grantor walks away clean no matter what the title history holds. That finality is a feature when both sides already know the title is fine — and a trap when they only assume it.
What a Warranty Deed Promises: The Six Covenants of Title
A general warranty deed earns its name from six legally binding promises — the covenants of title — that run from the grantor to the grantee. They divide into two groups: three present covenants, which are either true or broken the instant the deed is delivered, and three future covenants, which protect you for as long as you own the property.
The three present covenants
1. Covenant of seisin. The grantor actually owns the estate the deed claims to transfer. If the seller purports to convey full ownership but holds only a life estate, or holds nothing because a prior sale already passed title to someone else, this covenant is broken at delivery.
2. Covenant of the right to convey. The grantor has the legal authority to make this transfer. Ownership alone is not always enough: a property held in trust can generally be conveyed only by the trustee, a conservator may need court approval, and a corporation may need a board resolution. This covenant warrants that the person signing has that power.
3. Covenant against encumbrances. The property is free of undisclosed liens, easements, deed restrictions, and other burdens — except those specifically listed in the deed. Mortgages, tax liens, mechanic's liens, judgment liens, utility easements, and HOA restrictions all count as encumbrances. Standard practice is to list the acceptable ones (current-year taxes not yet due, recorded subdivision restrictions, existing utility easements) so the warranty covers everything else.
The three future covenants
4. Covenant of quiet enjoyment. Nobody with a superior legal claim will disturb your possession. If a long-lost heir with a better chain of title evicts you, the grantor has breached this covenant — even though the eviction happened years after closing.
5. Covenant of warranty (defense of title). The grantor will defend your title against lawful claims at the grantor's own expense. This is the litigation promise: if someone sues over ownership, the seller pays for the defense, not you.
6. Covenant of further assurances. The grantor will sign whatever additional documents are reasonably needed in the future to perfect your title — correcting a misspelled name on the deed, executing a confirmatory instrument, or supplying an affidavit the title company requires.
The critical word in "general" warranty deed is the time horizon: these covenants cover the entire history of the title, including defects created by owners long before the grantor. If a forged deed from 1987 surfaces in the chain, the general warranty deed you received makes your seller answerable for it. That backward reach is precisely what makes the deed valuable — and what makes sellers think twice before signing one.
The Middle Ground: Special Warranty Deeds
Between "I guarantee everything back to the land grant" and "I guarantee nothing" sits the special warranty deed (called a limited warranty deed in some states). It carries the same six covenants, but their scope is cut down to the grantor's own period of ownership: the seller warrants only that they did nothing to impair the title while they held it.
A special warranty deed says, in effect: "I did not create any liens or defects during my ownership, and I will defend against claims arising from my period — but what earlier owners did is your problem, not mine."
Sellers who never occupied or vetted the property's full history favor this form: developers conveying new lots, banks selling foreclosed homes, executors and trustees conveying estate property, and commercial sellers who owned briefly. Buyers accept it when the discount, the deal structure, or a robust owner's title insurance policy covers the gap. Note the practical consequence: with only the grantor's period warranted, the title search and the insurance policy do most of the protective work that a general warranty's covenants would otherwise do.
Some states also blur the vocabulary — a "deed without warranty" in Texas, a bargain-and-sale deed in New York — so always read the granting clause and the covenants section rather than trusting the document's title alone.
When a Quitclaim Is Enough
A quitclaim deed is the right instrument whenever the parties already know the state of the title and neither needs the other to guarantee it. The classic cases:
- Family transfers. A parent deeding a house to an adult child, siblings rebalancing inherited property, or adding a spouse to the title after marriage. Nobody is paying market price on the strength of the title, and a warranty would add paperwork without adding information.
- Divorce settlements. One spouse quitclaims their interest to the other as the decree requires. The divorce court, not the deed's warranties, is what protects each side — though the receiving spouse should still confirm the mortgage paperwork matches the new ownership.
- Moving property into a trust or entity you control. Transferring your rental house into your own revocable living trust or LLC changes the legal owner without changing the economic owner. You cannot usefully warrant title to yourself.
- Clearing clouds on title. A prior deed misspelled a name, a paid-off loan was never formally released, or a former owner with a possible residual interest agrees to release it. The quitclaim from that party removes the blemish from the chain so a later warranty deed or title policy can issue cleanly.
- Correcting errors. A corrective or confirmatory deed fixing a legal description or a vesting error is routinely done by quitclaim.
In every one of these, the grantee either already knows the title is good or is getting the property for reasons that have nothing to do with its marketability. The quitclaim's speed and finality are exactly what the situation calls for.
When a Quitclaim Will Cost You
Outside those trusted-party situations, accepting a quitclaim deed means accepting the full risk of the title's history. The specific hazards:
You inherit every lien and defect. Unpaid property taxes, IRS liens, HOA super-priority liens, mechanic's liens, judgment liens, undisclosed easements, and boundary disputes all pass to you with the property. Your only remedy is against... no one. The grantor promised nothing.
No lender will fund it. Mortgage lenders require marketable title evidenced by a warranty deed (general in most residential practice) plus a lender's title insurance policy. A purchase closed by quitclaim cannot satisfy either requirement, which is why quitclaim purchases are effectively cash-only transactions. If a "seller" offers you owner financing on a quitclaim and asks you to handle the paperwork yourself, treat that as a warning, not a convenience.
Title insurance may be unavailable or gutted. Most owner's policies are underwritten on the back of a title search plus a warranted transfer. Some underwriters will still insure a quitclaim transfer after a full search, but exclusions multiply and premiums rise — and a policy that excludes exactly the pre-existing defects you are worried about protects nothing.
Fraud loves quitclaims. Because the instrument asks nothing about ownership, it is the vehicle of choice for deed scams: forged grantor signatures, transfers by people with no interest to convey, and "buyers" who record a quitclaim against property they do not own. If a stranger offers you property at a steep discount via quitclaim deed, the discount is the risk premium for title that likely does not exist.
The rule of thumb is simple: if money is changing hands between parties who would sue each other over a defect, the deed must contain warranties. A quitclaim in an arm's-length purchase is not a bargain — it is an uninsured risk you cannot price.
Why Lenders Insist on Warranties
A mortgage lender's collateral is only as good as the borrower's title. If a superior claim wipes out the borrower's ownership, the lender's lien — which attaches to the borrower's interest — can evaporate with it. Lenders therefore impose a belt-and-suspenders regime on every financed purchase:
- A warranty deed into the borrower. The seller must convey by general warranty deed (a special warranty deed is sometimes accepted for REO and new construction, never a quitclaim), so someone solvent stands behind the title's history.
- A title search and commitment. A title company examines the chain, lists every lien and exception, and commits to insure over the rest. Anything the search finds must be paid off or released before funding.
- A lender's title insurance policy, paid by the borrower. This protects the lender's lien position up to the loan amount. It does not protect your down payment or your equity — that is what the optional owner's policy covers, and declining it to save a few hundred dollars at closing leaves the largest investment of your life insured only for the bank's benefit.
Refinances follow the same logic: you already own the property, but the new lender still requires a fresh search and a new lender's policy, because liens may have attached since you bought. Each of these steps exists because the lender has priced exactly the risk a quitclaim deed leaves on the table.
The Bookkeeping Side: Recording What the Deed Cost You
Deed type affects your books in two quiet ways: which closing costs become part of your property's cost basis, and how carefully you need to track them. Title insurance premiums, recording fees, transfer taxes, title search fees, and survey costs paid by the buyer generally add to basis rather than landing in the current year's expenses — and basis is what your eventual capital gain is measured against. Lose track of $3,000 in closing costs today and you pay tax on an extra $3,000 of phantom profit when you sell.
If you keep your books in plain text, the Beancount documentation covers balance assertions and cost tracking in depth; the pattern for a purchase looks like this, with every basis-adjusting closing cost folded into the property lot:
2026-10-22 * "Purchase rental house at 412 Elm St - general warranty deed recorded"
Assets:RealEstate:Rental-412-Elm 250,000.00 USD
Assets:RealEstate:Rental-412-Elm 1,850.00 USD ; owner's title policy + lender's policy
Assets:RealEstate:Rental-412-Elm 425.00 USD ; recording fees + transfer tax
Assets:RealEstate:Rental-412-Elm 600.00 USD ; title search + survey
Expenses:Fees:Mortgage-Origination 2,200.00 USD ; loan points - amortize, not basis
Assets:Checking -52,875.00 USD
Liabilities:Mortgage:412-Elm -202,200.00 USDTwo details matter here. First, the deed type belongs in the narration or a metadata line: when you sell in ten years, "general warranty deed recorded" tells you — and your tax preparer — that the title chain was warranted, while a file full of quitclaim narrations flags a title history worth re-examining before listing. Second, costs that look similar are treated differently: title insurance and transfer taxes ride with the property into basis, while loan points and prepaid interest go to expense accounts on their own schedule. One account per property keeps that split auditable.
Sellers have a mirror entry: transfer taxes and title-clearing costs you pay (satisfying an old lien so you can deliver the warranted title) reduce your amount realized rather than padding the buyer's basis, so track them against the sale, not the property.
How to Read the Deed You Are Handed
Before you sign or accept anything, read the operative language yourself — it fits on one page, and it decides everything above:
- Find the granting clause. "Conveys and warrants" (or "grants, bargains, sells, and warrants") means warranty deed; "conveys and quitclaims" (or "remises, releases, and quitclaims") means quitclaim. Confirm which of the six covenants appear verbatim — some states imply them from the granting words, others require them spelled out.
- Check general versus special. A special warranty deed limits the covenants with phrases like "by, through, or under the grantor" — the tell that only the grantor's ownership period is covered.
- Read the exceptions list. Every encumbrance the warranty does not cover must be listed. Compare it against the title commitment: anything on the commitment but missing from the deed's exceptions is still warranted against, and anything on the deed but new to you deserves a question before closing.
- Verify the legal description and vesting. The lot, block, or metes-and-bounds description must match the title commitment exactly, and the names and tenancy (joint tenants, tenants in common, community property) must match what you agreed. Most "title defects" that delay closings are typing errors at this step, not ancient forgeries.
- Confirm recording. An unrecorded deed is valid between its parties but invisible to the rest of the world — including future buyers and their title searches. Make sure the original goes to the county recorder promptly and the recorded original comes back to you.
And whatever the deed says, get the title search anyway. The covenants give you someone to sue; the search keeps you from needing to. A few hundred dollars of prevention at closing is the cheapest legal fee in the entire transaction — run the search, buy the owner's policy, and keep the recorded deed where your executor can find it.
