A deed is a legal document used to transfer ownership of real property from one party to another. There are three different types of deeds: general warranty, special warranty, and quitclaim, which is also referred to as "quit claim deeds" or even the common mistake "quick claim," a nod to the expediency of the quitclaim deed. All three types of deeds confer property title.
What are warranty deeds?
There are two types of warranty deeds, and it's important to be aware of the differences if you're transferring property ownership.
A general warranty deed says that the seller owns the property and that it hasn't been sold to another party already. Additionally, a general warranty deed says that there are no other legal claims on the property's title or debts that transfer with the property discovered during the probate process nor any outstanding liens. Traditional sale transactions work best using general warranty deeds, and most typical real estate transactions involve a general warranty deed because it confirms the seller has the legal right to sell.
Special warranty deeds
Special warranty deeds differ from general warranty deeds because while a general warranty deed guarantees a real property is free and clear of any liens or claims, the special warranty deed only guarantees that no liens or debts occurred while the current seller owned the property and makes no guarantees about any title defects, particularly under the previous owner. In other words, if there were claims on the property before the seller's ownership, the seller makes no promises to the buyer during property transactions.
What is a quitclaim deed?
The process through which owners quit the claim on their properties is called quitclaim deeds. A quitclaim deed is named as such because it means that the owner is leaving behind their claim on the property. Unlike warranty deeds, quitclaim deeds offer zero buyer protection. Much like the accidental misspelling of quitclaim as quick claim, a quitclaim deed document is a fast way to transfer real estate title from one owner to another.
The way a quitclaim deed works is that this type of transfer makes no seller guarantees. It merely states that the seller transfers any ownership interest to the buyer. So if the seller has absolutely no ownership interest in the property, that's precisely what transfers in a quitclaim deed to any buyer.
Jeb Smith, the founder of Parker Marker, a real estate firm, offers some advice on when to use a quitclaim deed. "It is important to note that a quitclaim deed does not provide any warranties or guarantees about the title of the property. The person signing the quitclaim deed is only transferring the rights they have in the property, and they are not making any promises about the property title."
When should I use a quitclaim deed?
Because a quitclaim deed offers no protection for buyers, it should not be used during traditional real estate sales. There is no guarantee of a clear title. Instead, quitclaim deeds are used when there is a property transfer outside of a real estate sale. No title search or title insurance is needed during quitclaim deeds. Consult an attorney before making such a decision, and one well-versed in family law for any quitclaim deeds between family members. Any business partners or other parties involved should consult their own legal representation as well.
Quitclaim deed transfers are ideal for:
- transferring property interest between family members, such as a parent to a child
- transferring property between married persons, as is the case when one party brings property into the marriage
- transferring property in the event of divorcing spouses, where one ex-spouse is relinquishing their property ownership and the other ex-spouse will remain in the home
- transferring ownership of property from personal ownership to a living trust during an estate plan
- fixing any errors on existing titles such as typos
Transferring property through quitclaim deed
In order to transfer property using a quitclaim deed, a quitclaim deed form must be in writing in order to be recognized. A quitclaim deed is a legal document and requires a legal description of the property being deeded, the county in which the property is located, the date of property transfer, the name(s) of the person transferring the property (grantor), and the name(s)of the person in receipt of the property (grantee). If any money is exchanged, that must also be noted on the quitclaim deed. This deed form does not suspend any mortgage obligation.
A quitclaim deed is signed by the grantor but not always the guarantee, or person receiving the property. The document is usually notarized, and in many states, the deed must be filled with the county clerk in the county where the property lies.
If you are purchasing real property, a quitclaim deed does not meet the level of protection you as a buyer should demand. Chuck Vander Stelt, a real estate agent in Valparaiso, Indiana, warns against using quitclaim deeds in such a transaction. "Using a quitclaim deed in an arm's length transaction should be a red flag to the buyer," he says.
State-specific quitclaim information
Requirements for quitclaim deeds vary by state, and some states have specific standards for quitclaim deeds that go beyond others. The following states have more detailed requirements.
In New Mexico, transferring property requires a new deed to be filed with the county clerk's office to include the name of the grantor, grantee, a physical description of the property beyond just a street address, and notarization. If the deed is a transfer of community property, both spouses must sign the deed, even if only one spouse is named as owner. A quitclaim deed costs $25 to file at the county clerk's office in addition to any costs associated with the notary public. There are no transfer taxes for deeds filed in New Mexico.
A quitclaim deed in Missouri may be handwritten, although most will choose to print them out. Missouri quitclaim deeds must be written in dark or black ink on watermark-free light or white paper. The grantee's address must be on the first page of the legal documents. Additionally, quitclaim deeds in Missouri require a physical description of the property being conveyed as well as the tax parcel number. While only the grantor signs the quitclaim deed in Missouri, they must be notarized. Missouri charges a flat fee for the first page of the quitclaim deed filing around $20, and each additional page is around $3.
Massachusetts has different definitions for a quitclaim deed. While other states make no requirements of the grantor and therefore do not protect the grantee, in Massachusetts, a quitclaim deed requires the grantor to defend against any legal claims during the grantor's ownership. In Massachusetts, a quitclaim deed is akin to a special warranty deed elsewhere. There is a $25 filing fee for new deeds in Massachusetts as well as a property transfer tax which is typically $2.28 per $500 of taxable value.
In Indiana, a quitclaim deed must be notarized in order to make the transaction official. There must be a legal description of the property that matches other records for it. The deed must contain this statement: "I affirm under penalties of perjury, that I have taken reasonable care to redact each Social Security number in this document unless required by law. This instrument is prepared by [printed name of individual]."
The new property owner needs to record the deed in the county where the property is. A recording fee that varies by county will be paid, and the deed will be sent back to the new property owner with a recording stamp. There is no transfer tax for quitclaim deeds in Indiana.
In Ohio, quitclaim deed requirements vary from other states. In addition to the name of the grantor of the property, an Ohio quitclaim deed must state the marital status of the grantor and the name of their spouse, if applicable. Additionally, the county where the grantor resides must be on the quitclaim deed. If there are any restrictions on the land, these must be included in the quitclaim deed, such as an easement that would allow neighbors to cross over the property to access a waterfront. Unlike many states, however, Ohio business law does not require a quitclaim deed to be notarized.
Quitclaim deeds are an expedient means of transferring property among family members, to living trusts, and also a good way to address clerical errors on existing titles. With the exception of Massachusetts, however, a quitclaim title offers a buyer no protection and therefore should not be used when buying or selling real estate
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