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A New Mexico property owner can transfer title to real estate by signing and recording a written deed. 1 A New Mexico quitclaim deed transfers all the signer’s rights or interests in the property with no warranty of title. 2 The new owner receives whatever title the current owner can legally transfer. The current owner does not guarantee that he or she actually owns an interest in the property.
Quitclaim deeds are best suited to transactions not involving an arms-length purchase. An owner who is adding a spouse to the property’s title, for example, often uses a quitclaim deed.
A property owner signing a deed with warranty of title makes a series of promises—called warranty covenants—about the quality of title the deed transfers. The owner guarantees the deed transfers valid ownership with no undisclosed liens or other title problems. 3 The owner also promises to stand behind the title and take responsibility if any title problems emerge.
Warranty of title protects the new owner against title defects affecting the property’s title. Title defects are title-related issues that make a property less valuable or marketable—including, for example:
A deed transferring real estate with warranty of title gives the new owner the right to sue the prior owner for breach of warranty if a title defect arises. A New Mexico property owner who brings a successful breach of warranty suit can recover the lost value of the property, interest, and attorney’s fees. 5
New Mexico quitclaim deeds provide no warranty of title by definition. The current owner gives no covenants of warranty. The new owner accepts the title in whatever condition it happens to be and cannot sue for breach of warranty if a title defect arises.
A quitclaim deed gives the new owner no recourse against the prior owner if—for example–the new owner discovers that the property is subject to liens for unpaid assessments.
New Mexico deeds with no warranty of title are nearly always called quitclaim deeds—sometimes written as quitclaim or quit-claim. Other states also use the term quitclaim deed or one of its synonyms:
New Mexico quitclaim deeds place all risk of title defects on the new owner. A property owner who quitclaims real estate to a new owner makes no promises regarding the presence or absence of problems with the property’s title. 8 That does not mean title problems actually exist. But if a problem arises, it is the new owner’s responsibility.
A purchaser giving valuable consideration for real estate may want greater certainty of a good, clear title than a quitclaim deed provides. New Mexico law authorizes other forms of deeds under which the current owner provides complete or partial warranty of title—allowing the current owner to bear the risk or share the risk with the new owner.
New Mexico warranty deeds—sometimes called general warranty deeds—transfer real estate with complete warranty of title. The current owner “grants” the property to the new owner “with warranty covenants.” 9 A New Mexico deed that provides warranty covenants includes the current owner’s implied guarantee of a good title, free from all defects not specifically excluded. The current owner promises to take responsibility if a title problem arises—regardless of when the defect originated. 10
New Mexico special warranty deeds transfer real estate with partial or limited warranty of title. 11 The current owner “grants” the property to the new owner “with special warranty covenants.” 12 A New Mexico deed with the words special warranty covenants includes the current owner’s implied promises:
A special warranty deed’s guarantee is limited because it covers only issues that arose while the current owner owned the property. The deed effectively divides the risk of title problems between the current owner and the new owner. Responsibility for an issue depends on when the facts giving rise to the issue occurred. The current owner bears the risk for problems that arose while he or she held title, and the new owner bears the risk for the rest of the property’s chain of title.
Note: New Mexico law recognizes another deed form called a bargain-and-sale deed. A New Mexico bargain-and-sale deed provides covenants of title that are functionally the same as those of a special warranty deed. 13 Bargain-and-sale deeds are no longer common in New Mexico and have largely been replaced by special warranty deeds.
A new owner who takes title to New Mexico real estate through a quitclaim deed—or any other type of deed—can mitigate the financial risk of title problems by purchasing a title insurance policy. Title insurance is a contract with an insurance company under which the insurer promises to compensate the insured person for financial losses caused by title defects. 14
Title insurance policies cover issues affecting the property’s value or marketability—such as:
A title insurer charges a lump-sum premium when issuing a policy—typically at closing. Insurers must conduct or arrange for a comprehensive examination of the real estate’s title—which increases the chance that unknown problems are discovered before a sale. 15
New Mexico quitclaim, special warranty, and warranty deeds all have names based on the warranty of title (or lack thereof) the deed provides. Each of the three makes a current transfer effective during the owner’s life.
New Mexico also recognizes two types of deeds—TOD deeds and life estate deeds—that are named after their functions and can be useful tools in an estate plan. Both deeds let the property owner keep possession for life and avoid probate at death.
The most common contexts in which New Mexico quitclaim deeds are used are when an owner retitles property without changing actual possession or transfers property to a family member for little or no consideration. A quitclaim deed can transfer property to a purchaser, but warranty and special warranty deeds are more common in that context.
A New Mexico real estate owner might use a quitclaim deed for any of the following goals:
All deeds that transfer New Mexico real estate must satisfy the state’s requirements for recordable deeds. A deed that fails to meet New Mexico’s deed requirements does not officially pass title to a new owner. 21 A quitclaim deed must also be recognizable as a quitclaim deed and not another deed form.
New Mexico has a statutory quitclaim deed form. 22 A quitclaim deed that uses the statutory form transfers the current owner’s entire interest—unless the interest is expressly limited—with no warranty. 23
New Mexico’s statutory deeds provide suggested language for deeds. The forms can be modified as needed, and other forms may still be used. 24 A quitclaim deed that uses a different form but otherwise complies with New Mexico law makes an effective transfer. 25
The New Mexico Legislature has not enacted uniform deed formatting specifications. Deeds should follow customary formatting standards to reduce the risk of rejection by the county clerk. New Mexico deeds are, for example, typically printed on 8½ × 11-inch (letter-size) or 8½ × 14-inch (legal-size) paper using black ink and a 10-point font or larger.
New Mexico deeds must also meet legal content and signing requirements by including, for example, the parties’ names and addresses, a legal description of the property, the transferring owner’s signature, and a completed notary certificate. 26
A New Mexico quitclaim deed form must comply with New Mexico law and accurately set forth the parties’ agreed transfer terms. A quitclaim deed created for another state may be invalid in New Mexico or have unintended legal results. A deed that fails to accurately reflect the parties’ terms may necessitate future legal expenses to correct the error or may even lead to a court case.
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Christopher R. Moore, Esq., is a Senior Research and Writing Attorney for DeedClaim, where he heads up legal research and content creation and assists in legal product development. He is also a member of the Real Property, Trust and Estate Law Section of the American Bar Association, where he is a member of the Trust & Estate Practice Group, Commercial Real Estate Transactions Group, and Non-Tax Estate-Planning Considerations Group.
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