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Disclaimer: The information on this page is not intended as legal advice for a specific situation because the specific facts of each situation are different and an attorney should be consulted for a legal opinion.
What type of deed is the “best”?
Generally three types of deeds are used in Maine – a Warranty Deed, a Quitclaim Deed with Covenant and a Quitclaim Deed without Covenant Deed (also called a Release Deed). A Warranty Deed is the best type of deed for a buyer to receive and carries the most liability for a seller. The signors of a Warranty Deed are promising that neither they nor their predecessors have created any title defects and the signors can be sued on the warranty covenants to fix a title defect if a subsequent purchaser discovers one which existed prior to the time the seller sold the property (sellers have no liability for a problem created after their ownership). If a seller holds an owner’s title insurance policy on their property, their is much less risk granting warranty covenants because an owner’s title insurance policy also protects the policyholder on warranty covenants which are given.
A Quitclaim Deed with Covenant transfers the property with a promise that the person who signed the deed did not create any title defects during their time of ownership (no representations are made about the status of the title before they owned the property). This type of deed offers less protection for a buyer, but may be the only type a seller is willing to provide if the seller was not conveyed the property by warranty deed when they purchased it (because the seller does not want to promise no title problems exist before their term of ownership if they cannot do back and sue the person who sold it to him/her if the need arose).
A Quitclaim without Covenant Deed (also called a Release Deed) is the type of deed which would be used to “sell the Brooklyn Bridge’. The seller is conveying whatever interest they may have in the property, but is not promising that they have any interest at all. This type of deed is frequently seen between spouses in a divorce. Suspicion should arise if a seller who is being paid for property refuses to convey by any type of deed but a Quitclaim Deed without Covenant.
It should be noted that no matter what type of deed one is receiving a title search is advised to see if there are any title defects and verify that the person selling the property has the right to do so. It’s much easier to protect a buyer up front with a title search than to try and sue a seller on warranty covenants after property has already been purchased. It should also be noted that a warranty deed is not a substitute for title insurance. When/if a title problem crops up it is much easier to simply turn the problem over to the title insurance company which has a great deal of resources to use to address it, then to try and find the person who sold the property to you, go through the expense of suing them on their warranty or quitclaim covenants, only to find they have no money to address the problem.
Should I request my deed be titled as joint tenants or tenants in common?
If two (or more) people hold title as joint tenants and one passes away, the property automatically passes to the surviving title holder(s) without necessity of probate.
If parties hold property as tenants in common, each person’s share would go to the owner’s estate upon their death and probate is necessary to pass the property to whomever should own it according to the deceased person’s will (or the intestacy statutes if there is no will).
Joint tenancy can be an easy and cost effective way for property to pass to a co-owner(s) upon one’s death. Spouses often take title as joint tenants. On the other hand, joint tenancy could frustrate an estate plan and it should not automatically be selected without consideration. For example, Jane is a widow and has three children. Jane’s estate plan calls for her property to be equally divided among the three children upon her death. If she adds just one child the title of a property as a joint tenant, when she passes away, that child would own the entire property and it would not be divided three ways.
Some states allow an additional type of tenancy – tenancy by the entirety. Maine does not have this option.