Types of Deeds
There are three main types of deeds that will apply to nearly all real estate properties: deeds of title (conveyance or transfer deeds), such as warranty and quitclaim deeds; mortgage or lien deeds (which convey an interest in property pending payment in full of a loan on the property or its land); and special conveyance deeds, such as the kinds that are administered by government entities in the case of tax sales, eminent domain removal of property and "take back" deeds, in the event of a foreclosure or voluntary foreclosure.
Warranty Deeds and Quitclaim Deeds
The main difference between a warranty deed and a quitclaim deed is that warranty deeds are used when the property is sold, whereas quitclaim deeds are typically used when there is no transfer or remittance of money (called "consideration") between the granter and grantee. In the crossover, a warranty deed can be given in the place of a quitclaim deed, but a quitclaim deed can never substitute for a warranty deed.
Ways to Hold Title to Properties
The owners of real property who want to transfer it by way of a quitclaim deed will need to concern themselves with what type of estates they are conveying in the property. Generally, there are three major ones: common tenancy, joint tenancy (with right of survivorship), and life estates. All of these pertain to the legal interpretation of "how" the property is owned as well as by whom.
How Deeds Are Conveyed
Tenants in common are actually co-tenants in that they all have some right to possess the property, either in equal or unequal shares; but none has the right to dispossess the other of their share. Those divided shares can be turned over to the other owners or to anyone else the holder of the share designates. Joint tenancies mean that the same owners possess an equal and undivided title to the property, and when one owner dies, the entire title (deed of ownership) automatically passes to the surviving owner. A life estate is when someone is given a tenant's right to use and to enjoy land and its structures for the life of the tenant. It allows a person to stay in his home for life even though he has transferred title of ownership to someone else.
Michigan charges what is called a transfer tax on the conveyance of deeds in the case of a sale; but whether or not transfer tax will apply to a quitclaim deed depends on who is receiving the transferred property, for what purposes, and under what circumstances. For instance, property deeded between two individuals as a gift or equal value exchange generally will not incur this tax, and when this happens, it is called an "exception." If a quitclaim deed between an owner and the person or entity to whom the conveyance is made makes any kind of monetary gain or financial profit (i.e., capital gain), transfer taxes and estate/property taxes may be collected on the difference between the fair market value of the property and the overage of the sale price (or profit) on that sale. See a professional tax consultant who specializes in real property for advice.