In Michigan, three types of deeds are used to transfer property to someone else. A quitclaim deed is one of them and it is by far the easiest to create. Though a quitclaim deed works well in particular situations, it isn't the best choice. Before deciding to create a quitclaim deed in Michigan, it pays to get an overview of the range of deeds and their best uses.
Deeds in Michigan
"Deed" is a term that both refers to the legal document that says an individual owns a particular piece of real property and to the legal paper that is used to transfer an ownership interest to another. A transfer deed in Michigan will be either a warranty deed, a covenant deed or a quitclaim deed. The differences between them are significant when it comes to the protections offered the buyer.
A warranty deed offers the most protection to the buyer, while a quitclaim offers the least. Because of that, the latter is usually reserved for situations where the person transferring a property interest, the grantor, and the person receiving the interest, the grantee, are related by blood or marriage.
Warranty Deed in Michigan
Most individuals purchasing real property in Michigan insist on warranty deeds. This is particularly important when the buyer and the seller are strangers. That is because, by signing a warranty deed, the seller makes important promises and guarantees about the property title.
Warranty deeds in Michigan contain six covenants:
- Covenant of Seizin: Grantor guarantees that they have legal title and possession of the property.
- Covenant of Right to Convey: Grantor guarantees that they have legitimate authority to transfer all or part of the title.
- Covenant Against Encumbrances: Grantor promises that the real property does not have any encumbrances like liens or mortgages other than those the deed lists.
- Covenant for Quiet Enjoyment: Grantor guarantees that the grantee will enjoy the right to quiet possession and use of the property.
- Covenant of Warranty: Grantor warrants that they are transferring valid title and possession that the grantee has the right to defend against.
- Covenant for Further Assurances: Grantor promises to defend the grantee’s title against any claims of superior title from anyone that challenges it in the future.
To successfully execute a quitclaim deed in Michigan, the property owner needs to complete a quitclaim deed form and sign it in front of a notary. Then they pay any transfer taxes due and record the deed in the land recorder's office in the county in which the property is located.
Covenant Deed in Michigan
A covenant deed provides less protection to a buyer of Michigan real estate than a warranty deed provides, but more protection than a quitclaim deed. This type of deed contains no implied covenants, so its protections are limited to covenants written in the deed.
Generally, covenant deeds guarantee that the seller has done nothing during the time they owned the property to create any competing interests in the land. This means that the seller is responsible if they already gave away or sold an interest in the property, or if they encumbered the property secretly.
However, they will not take any action to defend the buyer's title against older interests it may not know about. Given these limited guarantees, covenant deeds are used mostly for transfers of raw land that the seller neither used nor lived on.
Quitclaim Deed in Michigan
A quitclaim deed provides almost no protections to a Michigan property buyer. Though it is a legal document that conveys an interest in real property, that interest is defined in a limited way. The deed transfers whatever interest the grantor may have in the real property, but makes no promises or guarantees about:
- Whether the seller has an interest.
- What that interest is.
- Encumbrances or liens on the property.
- Whether anyone else claims an interest in the title.
If the grantor turns out to have no interest, the grantee receives nothing of value. And the grantor specifies that they will not defend the buyer against anyone else claiming title.
Finally, the quitclaim deed transfers the property as is, so any mortgages, property tax liens, judgment liens or other liens go with the property and become the sole responsibility of the grantee. This obviously means that anyone accepting a property interest under a quitclaim is taking a risk.
Uses for Quitclaim Deeds in Michigan
Despite the lack of protections for the buyer, quitclaim deeds are perfectly legal in Michigan. However, they are rarely used in arm's-length transactions between strangers. Rather, these easy-to-execute and simple documents are popular in Michigan as a way to transfer certain property interests between family members or co-owners of a property.
Quitclaim deeds are often used for:
- Transfers between family members.
- Transfers post-divorce from one ex-spouse to the other.
- Transferring property into or out of a revocable living trust.
- Transfer to change the way owners hold title.
- Transferring property from one co-owner to another.
Preparing a Michigan Quitclaim Deed
Under Michigan law,/mileg.aspx?page=getObject&objectName=mcl-565-152) preparing a quitclaim deed is fast and easy. Most individuals choose to use the quitclaim deed form available online, and simply fill it in. They must insert the usual information, like the name of the grantor and the property's legal description. Anyone can prepare their own quitclaim deed and no attorney is necessary.
What about witnesses or a notary? The law in Michigan does not require that anyone witness or sign as a witness on a Michigan quitclaim deed. However, the deed must be signed before a notary public.
Quitclaim Deed to Several People
It is possible to quitclaim property to several persons with one deed. The key in this circumstance is to specify how the two people will take title to whatever interest they get.
If the grantor wishes to quitclaim to two people who are not married, they take title as tenants in common. It is also possible to add the rights of survivorship through joint tenancy to the title, causing the property to pass to the survivor when the first of the two grantees dies. Otherwise, each person owns their share of the property, and when they die, that share goes to their heirs and not to the other owners.
A grantor can accomplish the same for a married couple by giving them a quitclaim deed as tenants by the entirety. Tenancy by the entirety in Montana is a special form of property ownership. It builds in the rights of survivorship, so that if one spouse dies, the other spouse owns the whole property.
Recording Requirements of a Michigan Quitclaim Deed
Quitclaim deeds are valid between the parties when they are signed. That means that if a grantor signs a quitclaim to a grantee, they cannot later claim an interest in the property regardless of whether the deed is recorded.
However, quitclaim deeds are valid only against third parties, such as subsequent purchasers who buy in good faith, after the deeds are recorded in the register of deeds office in the county where the property is located. Once the quitclaim deed is recorded, it provides notice to all potential buyers of the property transfer. Cost to record the deed varies by county.
Transfer taxes are imposed both by the state of Michigan and by the individual county. There are exemptions from transfer taxes, most notably, if the amount the grantee paid for the property is $100 or less. Taxes must be paid before an individual is permitted to record the deed.
- Technically, anybody can file a quitclaim deed as long as all the signatures are present and notarized. If the property owners cannot meet up, they may notarize their signatures individually and mail the deed back and forth between the required parties.
- Michigan is one of the states that require witnesses in addition to the notary, so make sure you have the proper signatures.
Teo Spengler earned a JD from U.C. Berkeley Law School. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an MA and an MFA in English/writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.