What Is a Quitclaim Deed? Definition and Purpose
Let me explain what a quitclaim deed is to you directly: it's a legal document that lets someone transfer their interest in a property to another person, but without guaranteeing what that interest actually is or if it's valid at all.
In essence, when you use a quitclaim deed, you're as the grantor releasing any future claims you might have on the property. I'm not promising you that I own it validly; I'm just saying I'll give up whatever claim I have. If I don't actually own anything, you as the grantee end up with nothing.
Key Takeaways
You need to know that quitclaim deeds transfer property interest without any warranty or guarantee of ownership. As the grantor, you're relinquishing any claim you may have, but you're not assuring that your ownership was valid to begin with.
These deeds are commonly used in situations that aren't sales, like transferring property within a family, adding or removing a spouse from the title, moving property into or out of a trust, or clearing up title confusion. As the grantee, you're taking on the risk because title insurance isn't usually involved, so verify the ownership yourself before accepting.
Remember, quitclaim deeds can be revoked if both parties agree, or you can challenge them in court if there's suspicion of fraud.
How a Quitclaim Deed Works
A quitclaim deed typically includes a legal description of the property, the name of the person transferring the interest—that's the grantor—the name of the recipient or grantee, the date, and notarized signatures from both parties.
You'll see these deeds used for transferring property in non-sale scenarios, such as between family members. They can add a spouse to the title after marriage, remove one after divorce, clarify inheritance ownership, transfer into or out of a revocable living trust, define an easement, or change how the title is held.
What you must understand is that a quitclaim deed doesn't assure the grantor has any real ownership interest; it just states that if they do, they're releasing it. So, if you're the buyer accepting this, you're taking the risk that the grantor might not have valid interest or that others could claim the property. No title insurance comes with it.
Types of Deeds: Quitclaim vs. Warranty Deeds: Understanding the Difference
Deeds differ based on what they guarantee during the transfer from grantor to grantee. Unlike a quitclaim deed, a warranty deed offers some level of assurance. Warranty deeds come in two main forms: general and special.
A general warranty deed gives you the highest protection as the grantee because it assures the grantor owns the property free and clear, with no other claims, covering the entire history even before the grantor owned it. If there's a breach, the grantor is responsible.
A special warranty deed confirms the grantor owns it and no one else has claimed it during their ownership period. These are common in commercial real estate sales.
When Is It Appropriate to Use a Quitclaim Deed?
Quitclaim deeds don't have the protections of other deeds, so use them only in specific situations. For instance, they're suitable for transferring real estate between close family members, like from a parent to a child.
Can a Quitclaim Deed Be Nullified?
Yes, you can generally cancel a quitclaim deed if both the grantor and grantee agree to reverse it. If the deed was used improperly or fraudulently, it can be challenged in court.
The Bottom Line
In summary, a quitclaim deed is a straightforward way to transfer interest in a property without guaranteeing valid ownership from the grantor. You'll find it most useful in non-sale situations like family transfers or title updates. But it comes with risks for you as the grantee since there are no warranties. Use it cautiously and only when it fits the circumstances.
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