When to Use a Quitclaim Deed

When to Use a Quitclaim Deed

by Brette Sember, Esq., April 2015

Quitclaim deeds are written documents used to transfer ownership (title) to real property (such as land, a home, a condo or any other kind of real estate). Quitclaim deeds are also sometimes called quit claim deeds or quick claim deeds because they are a fast way to accomplish real estate transfers.

Transferring Title with a Deed

There are several ways to transfer real estate title. A warranty real estate deed transfer is the most common type of deed used when property is sold to a third party in a typical real estate transaction. A warranty deed promises that the person transferring the property has good title to it and the right to sell it. It includes protections for the buyer, such as compensation if there is anyone else who holds superior title to the property. This type of deed promises that there are no liens on the property such as a mortgage, tax lien, or creditor’s liens. When a warranty deed is executed, a title search (a check of past deeds and liens for the property) is conducted to verify the seller has good title. Title insurance is usually purchased as part of the sale to protect the new owner if there is a problem. Warranty deeds are always filed with the county after they are executed.

So, what is a quitclaim deed and how it is different? A quitclaim deed transfers title but makes no promises at all about the owner’s title. A quitclaim deed transfers the owner’s entire interest in the property to the person receiving the property but it only transfers what he actually owns, so if two people jointly own the property and one of them quitclaims his interest to his brother, he can only transfer his half of the ownership. A person who signs a quitclaim deed to “transfer” property he does not own results in no title at all being transferred since there is no actual ownership interest. The quitclaim deed only transfers the type of title you own.

Deed transfers of any kind (warranty or quitclaim) impact only the ownership (title) and do not change or affect any mortgage on the property. The mortgage is a separate document. This is important in a divorce situation where one spouse may quitclaim the property to the other, but this does not remove either spouse’s name from the mortgage and the responsibility to pay it.

Do You Need a Quitclaim Deed?

The next question is when to use a quitclaim deed. Quitclaim deeds are most commonly used when property is transferred without a traditional sale. Examples include when property is transferred between family members (such as parents transferring a home to their children), between married spouses (after marriage when one spouse wants to add the other to the title of his or her separate property), between divorcing spouses (when one spouse will keep the home), or when property is being transferred into a living trust. The deed transfer is done simply and there is no title search or title insurance used. It is fast and easy. Quitclaim deeds are not used for real estate sales, because the new owner receives no guarantees about the title and how valid it is.

A quitclaim deed is also used to clear up title to property, if there is an issue with someone else possibly having an ownership right in the property, he or she can be asked to sign a quitclaim to make sure the new owner has complete title.

Creating a Quitclaim Deed

To transfer title by quitclaim, a quitclaim deed form must be in writing to be valid. This legal document includes a legal description of the property that is being deeded, the county it is located in, date of transfer, and the names of the grantor (person transferring the property) and grantee (person receiving the property). If a price has been paid for the transfer, that amount is included. The grantor signs the document and this signature is generally notarized. Witnesses may be required depending on the state. In some states the grantee also signs the deed. It is common to file the deed with the county clerk in the county where the property is located, but in some states this is not required.

Quitclaim deeds are a fast and easy way to move property among family members or to place real estate into a trust. They are not a method to use when selling real estate.

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