Help! Land sale K: Escrowing a quitclaim to avoid title cloud?

**Scoobey** · 12-24-2008, 07:34 AM

I'm putting together a land sale contract (agreement for deed) for commercial property in Illinois, on behalf of sellers. Sellers have heard horror stories about (a) clearing title and (b) evicting buyers in the event of defaults. A land sale K is designed to avoid these but it seems they're still a risk. Question is: has anyone tried asking the buyers to execute an undated quitclaim deed at initial closing, to be recorded in the event of default? Pros/Cons?

Buyers seem like good folks; it's just that in this economy sellers are worried about everything.

I've never heard of combining a presigned quitclaim with a land sale contract but my clients asked whether they could do so. Any thoughts appreciated!

**Greg** · 12-26-2008, 05:57 AM

From your question I gather that you are not an attorney and it sounds like you are crossing over into the realm of "practicing law" which is illegal in most states.

As an agent, I would be asking this question to the seller's attorney just to CMA. If you do it wrong, you will be the one the buyers and/or the sellers will be coming after.

**Scoobey** · 12-26-2008, 11:09 AM

I appreciate the good-faith warning! Actually, I am an attorney (in Oregon), but I do little real estate transactional law and the deal is in IL anyway. There is a seller's attorney, but while he likes the idea of using the quitclaim in this way, he's never actually heard of it being done. The sellers are family members; I'm sort of shepherding the process without being directly involved. Hope that clarifies things! Thanks.

**Greg** · 12-30-2008, 05:36 AM

Then you already understand the danger of signing a quit claim ahead of time.

**Scoobey** · 12-30-2008, 08:33 AM

I do - it's always a danger for the buyer to do so, but sometimes they still do it, esp. when there's seller financing and the buyer can't get into the market any other way. My q is, has anyone ever (on behalf of seller) asked a buyer to sign a q/c as part of a land sale contract/contract for deed?

Thanks.