Guest Post by Jim Mckinley from MoneywithJim.org
Property transfer can be a tricky subject for many, but most people know that some form of real estate deed is required to convey property. One such type that is fairly common but often misunderstood is the quitclaim deed. Here’s a quick primer on this particular type of deed.
What is a quitclaim deed?
A quitclaim deed is, at its most basic explanation, a deed where one party “quits their claim” to a particular property. It is mostly used when there is no sale of a property, only a transfer. This means that most quitclaim deeds are used in situations involving people who know – or at least highly trust – each other. Some of the most common situations for the use of a quitclaim deed include the addition or removal of a spouse’s name from the title, bequeathment, and transferring property into a living trust. Quitclaim deeds are a common way to resolve property transfer during a divorce.
A quitclaim deed basically states the property grantor and the grantee and passes along ownership. It doesn’t do much else, for instance, make any guarantees about the grantor’s ability to transfer the property or provide any protections for the grantee should something be amiss (property dispute, problem with the title itself, etc).
What a quitclaim deed is not
A quitclaim deed is not a general warranty deed or a special warranty deed. Both of those contain warranties of title. As LegalZoom says, these warranty deeds protect the new title-holder in situations where superior title is claimed or if any sort of loss is incurred by that. Warranty deeds also stipulate that the new title-owner can legally “purchase, possess and enjoy the property in question.”
In other words, a warranty deed transfers title in a way that makes sure that the person doing the transferring has the full right to do so. This, in a way, legally protects the new title holder. Quitclaim deeds provide no such protection.
What are the dangers of a quitclaim deed?
In the end, the true danger of transferring property with a quitclaim deed is that it provides no legal protections to the grantee. The grantee has no recourse against the grantor. This is why quitclaim deeds are really only used among people who know and trust each other. Quitclaim deeds also do not, in any way, concern mortgage obligations. That’s an entirely separate issue.
Why use a quitclaim deed?
While quitclaim deeds do have their fair share of risks, there are benefits as well. Quitclaim deeds are quick and easy. They are so quick and easy that they don’t even have to involve an lawyer. It is also a cheap way to resolve minor problems on a title like a name change or clerical error. You can get basic quitclaim forms online, fill them out yourself, and file them for a small fee with your county (to learn more about filing a quitclaim deed, check out this resource).
In the end whether you use a quitclaim deed for your property needs depends on exactly what you need done, how much you know/trust the people involved, and how much protection you desire from the deed. Quitclaim deeds are cheap, easy, and relatively painless – as they only require a notary and not an attorney. Before going the quitclaim route you should research the specific requirements in your state, as they do differ from place to place.
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