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Alexandra Rason Coons
acoons@taylorenglish.com
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Quit Claim Deeds Can Void Existing Owner’s Title Policy; Use with Caution

Quit Claim Deeds Can Void Existing Owner’s Title Policy; Use with Caution

Lawyers have been trained to avoid using a general warranty deed when representing a client in a real estate transaction or when conveying property between related entities or individuals. In instances of dissolution, merger, a transfer from individuals to a majority owned entity or a transfer between other related parties, where there is not a concern of a claim to title, a Quit Claim Deed is erroneously believed to be the type of deed of choice. While not intending to cause an issue with the client’s title insurance, the use of a Quit Claim Deed, in these situations, may void any existing Owner’s Title Insurance Policy in Georgia by canceling the “continuation of insurance.”  Even for this seemingly minor assistance to a client, it is critical to ask a knowledgeable real estate attorney and check the jacket of the client’s Owner’s Title Insurance Policy to determine how “continuation of insurance” is applied and how the “Insured” is defined. For example, “Continuation of Insurance” can only be maintained if the “Insured” shall have liability by reason of warranties in any transfer or conveyance of the Title.” 

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