There are a number of legal devices to transfer title to real estate. Each real estate deed has different benefits and consequences, and depending on the situation, a property deed may take the form of a special warranty deed, a general warranty deed, a trustee’s deed, or a quitclaim deed. This article will focus on the quitclaim deed.
Why is the type of deed important?
The type of deed used is important, most commonly because of potential title issues. Title issues are particularly tricky, as issues may arise many years after the property was conveyed (transferred to a new owner). The simple passage of time could make mistakes by former conveyances, or how the government keeps those conveyances, more likely. Imagine a title for a piece of property that goes back a hundred years – that is a lot of opportunity for a mistake to be made with the paperwork. And, as the world increasingly digitizes, errors can be made in transferring the physical property records to digital form.
Title issues usually include undiscovered issues with the property including, unknown second or third mortgages, property line or boundary issues based on erroneous surveys or unknown easements, and even forged public documents. In short, as time passes, the opportunity for mistakes statistically increases, as the more times a property is conveyed, the more issues it may acquire.
What is a quitclaim deed?
Quitclaim definition: A quitclaim deed is a legal document that lets an owner (grantor) transfer their ownership interest in a piece of property to a recipient (grantee), but offers no guarantee of ownership. Quitclaim deeds are rarely used when selling property, but are useful for transferring ownership between family members or transferring ownership into a living trust. Quitclaim deeds are documents that convey real estate to other persons or entities without any warranty of title. The quitclaim form conveys someone’s interest (the grantor) in property to another (grantee), whatever that interest is.
This interest passes from grantor to grantee and includes any liens and encumbrances on the property. Quitclaim deeds are usually used when there is no question about the standing of a particular title. For instance, couples commonly use a quitclaim deed in divorce to pass property to each other, as each spouse knows of any issues with the title to the property. Also, quitclaim deeds are often used among family members or transfers to a trust. Some states, however, allow a “deed in trust” to transfer title to a living trust.
Pro tip: A quitclaim deed provides the least protection for a real estate grantee. The grantee is receiving title to the property “as is,” and there may be encumbrances, known or unknown on that property that the grantee is receiving. For example, it would be possible for the grantee to gain a lien on the property, or to have been given erroneous property boundary information.
Quitclaim deed vs. warranty deed
The quitclaim deed is basically the opposite of a warranty deed, which promises or “warrants” that title is clear from any encumbrance or defect. A warranty deed is important for transactions where the buyer or grantee is generally unfamiliar with the specific title history of the property. There are generally two types of warranty deeds, a special warranty deed, and general warranty deed.
Pro tip: Sometimes a quitclaim deed may void title insurance policies, so check with the title insurance company about the title insurance procedures and language. Also, whenever there is a question of title whatsoever, a general warranty deed should be used by the grantee to reserve any recourse for unknown title issues.
How to file a quitclaim deed
Quitclaim deeds are usually filed at the recorder’s office or register of deeds office in the county where the property is located. As one can imagine, this makes the procedure of filing the deed different from county to county. The county should have a quitclaim deed form that it uses and this quitclaim form can usually be obtained online or at the recorder’s office.
Ultimately, quitclaim deeds are a simple device to transfer real estate where there is absolutely no question of title. But a quitclaim deed is the definition of “buyer beware.”
Ready to get started on a quitclaim deed? LegalZoom can help you create a quitclaim deed. Simply complete an online questionnaire, and we will create the legal documents and file them with the proper county office.