Quit Claim Deed Received for Adjoining Lot
Visitor Question: I purchased a neighboring piece of property from the county at auction. Though the advertisement did state that the lot could not be independently improved, but may be merged with an adjoining parcel; nothing was said that the deed would be a "quit claim" deed... which I was surprised with via US mail.
I would like to extend my landscape and retaining wall onto the property, but do not want to merge a quit claim deed with my existing valuable warranty deed property and residence. My future resale value could be affected if title insurance became a problem.
Any thoughts on how to do so without risking the county invoking the deed restriction?
Editors Reply: To start answering this, we want to explain for other visitors the difference between a quit claim deed and a warranty deed.
A warranty deed makes several guarantees from the seller to the buyer (and we use those terms whether or not any money was involved). It guarantees that the seller owns the land with a clear title, that the seller has a right to convey ownership, and that there are no undisclosed liens, easements, and so forth.
This contrasts with a quit claim deed, which is given when the seller can't make those same guarantees. The seller simply sells (conveys) whatever ownership the seller does in fact have. This type of deed is granted when the seller is not sure whether the title is completely clear.
So yes, it's better to receive a warranty deed than a quit claim deed. However, it is extremely common and the usual practice for a government to convey property at auction with a quit claim deed.
To answer a question not asked, if you want to be able to convey a warranty deed if and when you sell the property, you can consult with an attorney for help in transferring the property to yourself or some trust or LLC that you control. You would have to purchase title insurance of course.
Now on to the main concern of the visitor who asked the question. You can check with your county to make sure, but we wouldn't be concerned about extending landscaping and a retaining wall onto the adjoining lot.
The only reasons to check with the county at all are: (1) to find out if they consider a retaining wall to be an "improvement" or a "structure" and therefore prohibited by the deed or the terms of the sale, and (2) to find out whether there are any required zoning setbacks from the side lot line for the retaining wall (or we suppose the landscaping, but it's very rare indeed for landscaping setbacks from the property line to be required). The retaining wall also might or might not require a building permit.
Generally speaking, what most governments would mean by saying that the lot cannot be improved independently with a structure, but may be merged with other properties, is that the lot is not large enough (or perhaps correctly shaped) for a home to be permitted, but that the lot can be formally added to your existing lot if you go through the appropriate legal procedure.
If zoning somehow stymies your plans, you might want to pursue formally merging the newly acquired lot onto your primary lot. The county will tell you the provision for doing so. This would be when the type of deed would come into play.
But we emphasize that most people in your situation would simply landscape the lot next door, build onto the retaining wall to the extent permitted, and be done with it. This way you don't need to be concerned about the lot received through a quit claim deed somehow degrading the quality of the warranty deed you have on your other property.
This approach also has the advantage of allowing you to sell off the side lot separately at some point in the future if you wanted.
Our site does not constitute legal advice, but rather gives our perspective based on years of experience from the planning and zoning administration perspective. We hope this will give you some ways to think through the issue though.
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