What Is A Quitclaim Deed? How Does A Quitclaim Deed Work?
What Is A Quitclaim Deed?
A quitclaim deed is a simple legal document designed to facilitate the transfer of a property’s title from one party, the grantor, to another party, the grantee. This type of transaction does not involve any changes on the deed such as mortgage or lien payments and provides very little legal protection for the grantee who receives the property.
Therefore, in order for this form of transaction to be successful it is usually limited to properties being transferred between family members or trusted business partners.
This document allows for quick property transfers without too many legal complications and assists in transferring titles efficiently and effectively. However, other uses may include adding or removing a name from a title due to marriage or divorce.
How Does A Quitclaim Deed Work?
A quitclaim deed is ideal for straightforward ownership transfers, such as divorcing couples transferring a joint property to one spouse, parents granting their house to a relative without expecting payment, or when there are questions about another party’s rights to a property and you want them to relinquish these rights.
In divorce cases, the spouse who will not keep the home signs the deed which transfers their interest in the property to the other spouse awarded it; similarly, parents can use this same type of deed to grant their house to a child while avoiding any payments.
And finally, when issues with title raise questions of ownership of a property, an individual’s signature on a quitclaim can ensure they relinquish possible rights thereby avoiding future disputes.
The Difference Between Warranty Deeds And Quit Claim Deeds
The key difference between a quitclaim deed and a warranty deed is that the latter provides a guarantee that the grantor has valid, clear and complete interest in the property being transferred, as well as ensuring it is free from liens.
A quitclaim deed does not make any such assurances about title ownership or potential encumbrances; rather, it is used only to transfer what rights the grantor actually possesses.
For example, if two people own a property jointly and one of them transfers their interest via quitclaim to another individual, they are only passing along their half of ownership.
When To Use A Quitclaim Deed?
A Quitclaim Deed can be a practical solution in various situations: when you get married and wish to add your spouse to the title; during a divorce and need to transfer the title between you and your ex-partner; after someone has left their property to someone else in their will; when gifting property and wanting an unabridged title transfer that is low-cost; or in case of errors on the current title that requires revising.
These are just some typical examples of how a Quitclaim Deed is used, but one thing that remains constant is the mutual trust between two parties, meaning there is minimal possibility for any kind of fraudulent activity.
How To Create A Quitclaim Deed
If you want to transfer the title of a property via a quitclaim deed, you need to have a written document in the form of a quitclaim deed.
This document should include some basic elements such as the legal description of the property, the county it is located in, the date of transfer, and the names of both parties involved – the grantor and the grantee. Additionally, if applicable, it should also indicate a price that has been paid for this transfer.
In order to fill out a quitclaim deed form, you need to take the following steps:
List both the grantor and grantee (or grantees), as they will be either individual or corporation entities. Determine the consideration that will be given by the grantee to the grantor for acquiring interest in the property.
The consideration should always be listed in the document, even if it is a gift of just one dollar, in order for it to be a valid agreement. Additionally, you can find more information about consideration if needed.
Include a legal description of the property: You will need to include a description of the property in the quitclaim deed. This can typically be found at your local County Clerk office or Registry office, or you may locate it on an existing deed to that property. In some cases, you may also have to list the parcel ID number on the quitclaim deed; this number is usually located on your past tax statements.
Execute the deed: The grantor of a quitclaim deed must sign it before a notary public. Some states may also require witnesses to sign it as well as require the grantee to sign off on it too.
Filing the deed: After signing, you should file it at your local County Clerk’s office or Registry office if required by state law (not all states do). Upon recording, you should then send a copy of the document to the grantee.
What Are The Advantages Of A Quit Claim Deed?
Quitclaim deeds are an effective way to transfer titles between family members,
The forms used are simple offering the tax-related benefits associated with gifting while bypassing the need for a real estate agent or attorney. and only require notarizing and a witness signature in order to be legally binding. Moreover, when a quitclaim deed is used to transfer property before an owner’s passing, the property can avoid going through probate.
However, it should be noted that quitclaim deeds do not transfer mortgages or any existing tax liens on the property; thus, the previous owner remains financially responsible for any money owed on the house.
What Are The Disadvantages Of A Quit Claim Deed?
The drawbacks of a quitclaim deed include no protections for the transaction, as warranty deeds offer more safeguards for the new property owner, making it difficult to guarantee that the land is owned free and clear of easements or restrictions.
Furthermore, responsibility for verifying information about the property falls on the grantee, meaning they should conduct a title search before signing in order to protect themselves from potential problems.