Only got a quitclaim deed -- what should I do?

[JudyS]

Ok, here is a situation I haven't run into before.

The HOA of a resort in Texas (Inverness at Walden II) was offering weeks very cheaply. So, I decided to pick up a couple. Well, my deeds arrived today, and they are just quitclaim deeds. I had expected to get a warranty deed -- the management said nothing about just giving me a quitclaim deed. :annoyed:

I called the management company, and pointed out that quitclaim deeds are not designed to transfer property. The person I spoke to said, "That's how we transfer timeshares in Texas. That's all that's required." I asked to speak to the president of the HOA, who was the one who signed the deed, and the person at the management company said they could pass on a request for him to contact me -- but I already tried that over a month ago (I had some suggestions to make) and he never responded. :annoyed:

Here are my questions:

1) Am I correct in assuming that the person at the management company is wrong? I know that Texas "Is like a whole 'nother country," the way the Texas tourism department says in their ads, but they still use warranty deeds to transfer real estate like the rest of the US, don't they?

2) How will having a quitclaim deed affect me? Does it help that the quitclaim is signed by the President of the HOA, as opposed to, say, some random homeless guy the resort grabbed off the street? If I want to sell this, can I still offer a warranty deed? If problems with the deed surface later, and I have offered a warranty deed, what is my liability? The price paid for the property, or something else?

3) If having just a quitclaim deed is going to cause me problems, do I have any recourse here? I never signed anything saying that I would buy this; I just gave them a credit card number over the phone. It has been less that 60 days since my credit card was charged; however, I have already paid the bill in full.

This resort still has cheapo weeks available, although I'm not sure I can recommend them until I better understand what it is that they just gave me.

 

[Harry]

You take property as is...

Quit Claim deeds are great instruments. I just issued one yesterday for $300,000. The law, even in Texas, basically says that this transaction is taken with no warranty of anything. So, if there is anything wrong with the title, you get the problem.
Do you have good title? Don't know. I would bet you do. What probably happened is that the association took the units back (foreclosures) and had to dump them and you picked them up. Many assoication do it that way. I picked up one that way in Hawaii (Lawai Beach Resort). Check with the county where the resort is located to see the status of the taxes and whether the title is ok. Let us know if you find anything.

 

[Jimster]

Quit claim

A quit claim deed transfers: "whatever interest they have in the property, if any". If there are outstanding deficiencies in the property, you now have them. Probably the most obvious deficiency would be back maintenance fees due and owing, but you ought to be able to get an answer to this issue from the HOA president. The only real way to know what is out there would be with a title search and even then, it would not be definitive. A tax deed would be better- issued from a judge because that would cut off most possible liabilities, but you have what you have. If they will give you a warranty deed all the better.

In all liklihood the quit claim deed is just fine if it is issued by the HOA. What would not be covered would be issues relating to marital property and disputes arising from that as well as other possible clouds to the title like an outstanding mortgage. The HOA would not necessarily know about those issues and they could impact title. The bottom line is if you got a good deal and the HOA recognizes you as the owner and you can use and deposit from them- then you're ok. I am assuming you didn't pay thousands and thousands of dollars for the property. Now if this were a $60,000 Marriott property I wouldn't be saying this. As to selling it, hmmmm. Do you really think you are going to sell it for a price that matters? If you are expecting to sell it and get another $25,000 you are unrealistic. You may end up giving it away and taking a loss. Again, it depends on how much you have invested in it. If you spent alot for the property, you might be able to use the type of deed as a basis for recission. Finally, while a warranty deed is always preferable, what good is it in a TS situation anyway? I know there are people here who will blather on and on about it, but as a practical matter, it makes little difference most of the time. One of the warranties (and perhaps the most important of the 4) is that you have clear title to the property. And if you don't.... and you discover that at a later date, you will do what? Travel to Texas to sue the guy from Columbia that sold it to you and ask for you money back after you hire a private investigator to find him, serve him with process and subject him to the court years after the transaction occurred only to have him contend that someone forged his name to the document or some other ridiculously costly and time consuming scenario. There are two systems operating out there- What is legal and what is practical. They don't always coincide with each other. So, if you got the property at a good price and you can trade it, use it and enjoy it and there doesn't seem to be anyone in the wings contending an interest in the property, then I guess its just fine. It really is one of those old situations- if a tree falls in the forest and there is no one there to hear it, does it make a sound. I am sure there are others on here who will disagree but this is a practical matter- not a legal one. For those that believe it is a legal matter, maybe you can get give a lawyer a $5,000 retainer to find out.

BTW Another way to look at it is this. How many years of ownership/trading would it take for you to get your money's worth? If the answer is not many, then no worries.

 

[Mel]

I wound contact the county, and do what you can to verify that the title has no clouds - that the resort did in fact forclose on the property, and that they did in fact own what they are passing on to you.

As others have stated, they passes whatever they own to you. For the purposed of using the week or depositing with an exchange company, it doesn't really matter who owns it, but rather who the resort recognizes as the owner. If 5 years down the road the previous owner makes a fuss and claims he owns it, you have gotten 5 years of use for whatever you paid. I am assuming you did not pay a large amount of money for this, so it would be an acceptable "loss."

The only thing I might worry about would be leins that made it through a forclosure, but that should be rare. However, the resort may have accepted the week as a deed back, and the old owner may have filed a quit claim deed. Then I would worry a bit more about leins, so again, contact the county, and see what you can find out.

 

[bogey21]

This thread triggers a thought in my mind. Four of my Weeks are titled to me and my Daughter. Nothing fancy, just Mr. Father and Ms. Daughter.

Question: Can I quitclaim my half (or whatever it is I own) to her now so she can avoid Probate later?

Question: If that works, can she, when she goes to sell one of the Weeks sometime down the road, issue a Warranty Deed to the purchaser?

GEORGE

Added info: The deeds have just the names. No JTWROS at the end.

 

[gsturtz]

I'm no atty, and I DEFINITELY did not stay at a holiday inn express last night, but is your current deed listed as Jopint tnants with right of survivorship? If that's the case it should transfer smoothly to her upon your demise. If you were to quitclaim it to her, I believe you would be dealing with a taxable gift, but as long as your share is <10K (limit may have gane up) there is no tax liability on your part. She may still need to treat it as income, though.

Mod: Feel free to delete this if someone smart comes up and tells me I'm AFU.

 

[Laurie]

I bought a TS in Cape Cod years ago, and was issued a quitclaim deed by the timeshare realty co who did the closing. When I asked about it, I was told that's how they do them there.

Then recently I sold a timeshare, a different one in Cape Cod, and the resort offered to draw up the new deed at no charge. Turned out it was a quitclaim deed. So I guess that *is* how they do them in MA, as well as in TX.

I wouldn't worry about it, I assume that resorts and timeshare realty companies wouldn't issue them if the new owner couldn't resell and they expect problems down the line.

 

[johnmfaeth]

Three points:

1) If at some point you sell and he buyer seeks a title insurance policy it may be impossible to insure.
2) Don't assume that an actual legal foreclosure process took place. Often deadbeats will get a chance to turn the unit back to the HOA using a "Deed in Lieu of Foreclosure". A real foreclosure adds a few thousnad dollars and a year or two of court time to the process. No HOA wants to invest $3,000 if it is a non-premium unit.
3) If the HOA did get it through foreclosure, one risk is that the old owner shows up and pays off the debt and "redeems" the unit. Different states have different timetables for this to occur.

 

[Jimster]

deed

John's three points are valid. To which I would add, depending how old the property is, there actually be several previous owners in the chain of title. Any of which may cloud the title in any number of ways. I'm sure some HOA and developers acquire title to some properties time after time. As long as you are not risking a great deal of money, however, it may not be a bad deal. The impact of some prior owner coming in and redeeming the property (typically within 1-3 years depending on the state) would be that they might have a claim on the property. Hopefully, you have already used the property and made timeshare deposits with exchange companies to the point you got your value out of it. Don't forget, if a former owner should ever come in and claim ownership (I suspect this happens almost never), the worst effect at that point is they could somehow reacquire ownership- but with that they get to pay the maintenance fees forevermore. So, the worse that could happen is it would be like renting the use of the timeshare for a few years. If the price is right, what a deal!
If you look at a TS from the same perspective as when you look at the purchase of your home (as an investment to be handed down from generation to generation and I've heard TS salesmen try to sell that concept), I think that's not a particularly effective view. While the topic of a timeshare as an investment has been discussed here several times, in my mind it really isn't an investment in the same sense. Given the costs, most people (even when they have it deeded to them) should consider it more of a convenience or a right of use. Use it while you have it. Enjoy it. I suspect another factor contributing to the "investment" idea is when people plunk down the kind of money developers ask for high end properties, they want it to be an investment. People who really use them as investments usually do not pay developer prices.
To me, the bigger problem with TS is not that someone could come in and take it away, but rather getting rid of it when you tire of making annual fees because the owner gets sucked into making those payments as long as they own their property. The desire to use the property or to use it to trade may long since have disappeared, but the MF's continue.

 

[FredaS]

Quit Claim deeds are legite. As stated in prior posts, yes.. if the seller had fees or clouds against the title they would transfer to you but from my experience that normally is not a situation when the quit claim comes from the resort.
When you are ready to sell or transfer ownership on, yes you can issue a warranty deed no problem. You should be fine with all of this. I would only worry if you obtained a Quit Claim from an unknown individual without getting Title insurance.

 

[wackymother]

I bought a TS in Cape Cod years ago, and was issued a quitclaim deed by the timeshare realty co who did the closing. When I asked about it, I was told that's how they do them there.

Then recently I sold a timeshare, a different one in Cape Cod, and the resort offered to draw up the new deed at no charge. Turned out it was a quitclaim deed. So I guess that *is* how they do them in MA, as well as in TX.

I wouldn't worry about it, I assume that resorts and timeshare realty companies wouldn't issue them if the new owner couldn't resell and they expect problems down the line.

I bought a timeshare in Cape Cod earlier this year and got the same story. Then when I got the "new owner" paperwork from the resort, sure enough, somewhere in there it did mention a quit claim deed as being the only acceptable document.

 

[JudyS]

Thanks very much for the replies here! They have been very helpful!

I paid very little for these weeks, so the possibility of a previous owner coming back and "repossessing" a week doesn't really worry me. As several people have said here, I will likely get my money's worth out of these weeks even if I only own them for a short while.

Rather than losing ownership of these weeks, I'm more concerned about whether having less-than-great title might mean that I can't get rid of the weeks, and end up having to pay MFs on them forever. Since I wasn't too thrilled about getting just a quit-claim deed, I was worried that maybe no one else would want these weeks in the future, if all I could offer was a quit-claim deed.

However, based on what I am reading here, it seems that I can offer a warranty deed if I sell or give away one of these weeks in the future, even though I only received a quit-claim deed. Is that correct?

Suppose I sell one of these weeks in the future (let's call the new buyer "Joe Smith") and I give Joe Smith a warranty deed. Then, it turns out the title that I transfered was no good. What would I need to do to satisfy the conditions of the "warranty" of the deed that I had provided? Would simply giving Joe Smith his money back be enough? If I provide a warranty deed and then an older owner reclaims the week, is there any way that I would owe Joe Smith more than the amount he paid me?

 

[x3 skier]

Thanks very much for the replies here! They have been very helpful!

However, based on what I am reading here, it seems that I can offer a warranty deed if I sell or give away one of these weeks in the future, even though I only received a quit-claim deed. Is that correct?

Suppose I sell one of these weeks in the future (let's call the new buyer "Joe Smith") and I give Joe Smith a warranty deed. Then, it turns out the title that I transfered was no good. What would I need to do to satisfy the conditions of the "warranty" of the deed that I had provided? Would simply giving Joe Smith his money back be enough? If I provide a warranty deed and then an older owner reclaims the week, is there any way that I would owe Joe Smith more than the amount he paid me?

With the caveat that advice is worth what you pay for it, I bought a unit (10 weeks total annual use) at a Sheriff's sale in CO after the HOA foreclosed for lack of payments of an assessment. I received a Sheriff's Deed of Trust which I took to the County, registered it and then asked a Title Company about Title Insurance. The President of the Company told me he would sell me the insurance but a Sheriff's deed is the strongest type one can get so I passed.

If you are still concerned, I would ask a Realtor, lawyer and the County Clerk exactly what would be your obligations if you sold regardless of type of deed. With the exception of the Lawyer, you probably can get an answer for free.

Cheers

 

[Jimster]

deeds

There is a big difference between a sheriff's deed and a quit claim deed. I made that point in my earlier post.

 

[x3 skier]

There is a big difference between a sheriff's deed and a quit claim deed. I made that point in my earlier post.

Didn't know that a Sheriff's Deed of Trust was the same as a "tax deed". In my particular situation, there were no taxes involved that I knew of as it was a failure to pay a special assessment for maintenance and new siding. It was issued by the Sheriff, not a judge. Clearly. as you note, either a Tax Deed or Sheriff's Deed of Trust are the best kind.

In any event, the points you made are certainly valid since even if the previous owner claimed the property in the OP's case, the perspective of "renting a time share" is a good way to weigh the options. In my case, the previous owner had 90 days by law to pay the amount due or forfeit all future claims to the property and if they did, my money would be refunded.

Cheers

 

[FredaS]

There indeed is a difference between the two deeds but again, yes... you can offer a Warranty Deed even if you had been given a Quit Claim deed. I work in a closing company and it can be done and is done quite often. The Quit Claim has to be searched to the previous owners to ensure that it is free and clear.

 

[JudyS]

There indeed is a difference between the two deeds but again, yes... you can offer a Warranty Deed even if you had been given a Quit Claim deed. I work in a closing company and it can be done and is done quite often. The Quit Claim has to be searched to the previous owners to ensure that it is free and clear.

Thanks for the information, Freda! If the previous owner was the HOA, would that make the task easier?