What Is A Quitclaim Deed?

What Is A Quitclaim Deed?

Posted by on Aug 29, 2019


If you have ever purchased or sold real estate, you may have received or been granted a deed in the process. If it was a traditional transaction between unrelated parties, you probably came across what is called a general warranty deed, which provided you assurance as a buyer that the seller owned the property outright, or vice versa. However, it is possible that you have never handled or been issued a quitclaim deed. Although similar in purpose to a general warranty deed, quitclaim deeds have unique features that differentiate them.

Defining a Quitclaim Deed. 

A type of deed less common than a general warranty deed that serves a similar purpose with a lower level of buyer protection is a quitclaim deed. Quit claim deeds are used to transfer an owner’s entire interest in a property. If an individual or entity quitclaiming only holds a 25 percent interest in the property, only that 25 percent interest is involved in the transfer of ownership. 

What differentiates a quitclaim deed from other types of deeds (particularly general warranty or special warranty deeds) is that it transfers the title on the deed between two counterparties but makes no guarantees about the seller’s title. General warranty deeds guarantee that the seller of the property has the right to transfer the property to you and that there are no liens against the property from a mortgage lender, the Internal Revenue Service, or any other type of creditor. Quit claim deeds contain no warranties to the title and do not require a title search or title insurance. 

For example, in a situation where a seller transfers ownership of a property to a buyer using a general warranty deed, but liens do still exist on the property involved in the transaction, the buyer has the right to sue the seller for legal damages. In a similar scenario where the grantor transfers ownership of the property with a quitclaim deed, the grantee does not hold the same protection in the event a seller is not forthright in disclosing the rights of one or several creditors to the property. 

Transferring ownership stake in a property with a quitclaim deed does not rid a grantor liability on any liens or mortgages on the property. In a scenario where a grantor transfers ownership in a property to a grantee and there is still a mortgage agreement associated with that property, the grantor is still on the hook for that mortgage unless a separate legal document exists stating the grantee must pay the remaining balance of the mortgage on the property. In other words, a quitclaim deed can transfer ownership of the property, but separate documentation is required to transfer liability on the mortgage of the stated property.

When to use a Quitclaim Deed. 

Given the lack of protection a buyer holds in acquiring a property or properties using a quitclaim deed, it is important to understand the value of a quitclaim deed and the right situation in which to use it.

For this reason, quitclaim deeds are a vehicle most commonly used to quickly transfer real estate between family members, recently married couples, divorcing spouses, or into a living trust. Quit claim deeds can also be used to clear up title defects in instances where the wording on a deed is incorrect, a signature is missing, a deed contains misspellings, or in instances when an unrelated individual has an ownership stake in the property. In this case, the person may be asked to sign a quitclaim deed to ensure the title is clear. 

A quitclaim deed is often referred to as a “quick claim” deed because of its ability to expedite the ownership transfer process. They are commonly used in transactions between individuals who know each other; not in a formal transfer of real estate between two unfamiliar entities. A quitclaim deed must include:

  • A legal description of the property involved in the transaction 
  • The county in which the property is located
  • The date of the transfer 
  • Name of the person receiving property and the person transferring the property 
  • The price (if applicable) and the signature of the grantor. 

Depending on the state, the deed may have to be notarized or may require witnesses upon signing.

The bottom line. 

A quitclaim deed conveys to the grantee whatever interest the grantor held in the property. It is considered the deed with the least amount of buyer protection, meaning there are no warranties promising the quality of the title and thus protecting a buyer. A quitclaim deed contains no title covenant, therefore offering the grantee no warranty to the title. It provides the grantee no option for legal recourse in the event a grantor owns no interest in a property or owns an interest in a property with liens on a mortgage. 

It is critical to understand the risks associated with using a quitclaim deed to transfer ownership in a property. You should not use a quitclaim deed in a situation where the grantor is an unfamiliar individual or entity, due to the lack of legal recourse available to a grantee. You should only use a quitclaim deed to transfer ownership of a property or properties with someone you know and trust, whether that be a family member, spouse via a recent marriage, or a former spouse following a divorce. 

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