Bulletin: MI000020

Dear Associates:

Reliance on quit claim deeds is increasingly resulting in title claims.  They often appear in claim situations involving fraud.  A quit claim deed merely conveys whatever interest (if any at all) that its grantor had in the property.  It does not provide any warranties of title.  The lack of warranty limits the loss recovery success in the event of a claim.  Furthermore, it eliminates the use of a powerful tool when being requested to indemnify or insure over an interest recorded in the wrong order in the chain of title.  That tool is the Doctrine of After-Acquired Title which is not applicable to a quit claim deed.

Frequently, quit claim deeds are prepared outside of a typical closing, and outside the direction or control of a title agent or an attorney.  The "prepared by" recital often indicates that the deed was prepared by the grantor, grantee or by the notary.  Whether the quit claim deed is being presented currently or found back in the chain of title, a quit claim deed should not be accepted without verifying its authenticity directly with the grantor and verifying the authenticity of the Notary Public with the county clerk.

A valid deed must be delivered and accepted to be an effective conveyance.  Often there is no way of knowing if these elements have been met when fully executed deeds are presented at the closing table without both the grantor and grantee present.   In a 2002 unpublished opinion, the Michigan Court of Appeals (case number 226514, In re Estate of Kevin Michael York, Deceased), set forth Michigan 's case law on this subject.  Specifically, it provided:

There must be delivery of a deed to pass title. Schultz v Silver, 323 Mich 454, 461; 35 NW2d 383 (1949). The purpose of the delivery requirement is to show the grantor's intent to convey a present interest in the property described in the deed. Energetics, Ltd v Whitmill, 442 Mich 38, 53; 497 NW2d 497 (1993); Lintner Estate v Meier, 344 Mich 119, 124; 73 NW2d 205 (1955). Physical delivery of the deed to the grantee creates a rebuttable presumption of an intent to pass title. Resh v Fox, 365 Mich 288, 291; 112 NW2d 486 (1961). In addition, the grantee must accept the deed for it to be effective. Gibson v Dymon, 281 Mich 137, 140; 274 NW 739 (1937). The grantee's possession of the deed creates a rebuttable presumption of delivery. Schultz, supra.

Underwriting approval must be sought prior to insuring a quit claim deed or insuring over a quit claim deed recorded in the last five (5) years in the chain of title.  The only exceptions are in cases involving the settling of an estate, dissolution of marriage or correcting a prior document.