Deeds are legal documents that transfer ownership of real property from one party to another. The real property in question could be a vacant parcel of land, a mobile home, an apartment, or even a large factory. There are several different types of deeds used for real estate transfers, each of which conveys a different type of interest in the property from the grantor/seller (the person giving the property) to the grantee/buyer (the person receiving the property).
Quitclaim deeds (sometimes misspelled as "quick claim deeds") are one such type of deed. They're rarely used in an ordinary, arms' length real estate sale, however. That's because they could present a significant risk for the buyer. Whether you are a buyer or a seller, you should be aware of the uses of and risks associated with this type of legal document.
What Is a Quitclaim Deed?
Normally, something called a "grant deed" or "warranty deed" is used to convey title to a particular property or parcel of land. In exchange for a fixed amount of money, the seller agrees to give good title to the buyer. “Good title” in this context means that the seller actually owns the parcel; the buyer won’t move any furniture into the house, only to have a third party suddenly emerge and claim to be the true owner.
A buyer who was given a grant deed or warranty deed in the above scenario would likely sue the seller for fraudulent misrepresentation, among other claims. After all, the seller promised good title to the property.
A quitclaim deed is quite different. A seller who gives a quitclaim deed is promising merely to convey whatever interest he or she might have in the property. That interest could be full title, or it could be absolutely nothing. A quitclaim deed passes only such right, title, and interest as the grantor has at the time of making the deed. Put differently, the grantor makes no warranties, guarantees, or promises about the property. This is the complete opposite of a warranty deed, in which the grantor transfers property with a guarantee of clear title.
When It's Appropriate to Use a Quitclaim Deed
Given all of this, why would anyone want to use or accept a quitclaim deed?
The simplest situation in which a quitclaim deed is useful is for transfers where the property is being given to someone else, rather than being sold.
For example, parents may quitclaim a property to their children when they move to an assisted living center, or for various financial reasons. A married co-owner may quitclaim his or her share of the property to the other co-owner during their divorce. Or, a sole owner can create co-ownership with someone else by using a quitclaim deed, perhaps after marriage in order to establish co-ownership of the home. An owner might also quitclaim title to the property into a revocable living trust, for estate-planning reasons.
Quitclaim deeds may also be used to deal with the possibility of existing or possible questions about a property’s title. A quitclaim deed is also known as a “deed of release” for this reason. If there’s a chance that someone could have a claim to the property, such as a divorced or divorcing spouse, or there’s a problem with the chain of title to the property (e.g., a paid-off loan that wasn’t properly released) a quitclaim deed from the appropriate party can be used to resolve the possible “cloud” or defect in the title. Such “clouds” can affect value and the ability to sell property.
Consider this example: Bob and Susan are getting a divorce. Susan will be keeping the house, and that issue is resolved between them, although no final decree of divorce has been entered. Susan wants to sell the house to Rita and move to a smaller apartment. Rita is worried, however, about potential third-party claims by Bob after she buys the house from Susan, given that he and Susan are technically still married, and Bob's name is on the house title. Rita’s concerns would be resolved, however, if Bob simply provides her with a quitclaim deed. This quitclaim deed would grant to Rita any interest that Bob may or may not ever have in the property. This would allow the sale between Susan and Rita to proceed.
Consider another example: In a tax sale, a local government or “taxing body” sells a property in order to collect unpaid taxes. Through a quitclaim deed, the government conveys to the tax-sale buyer the interest it gained in the property under state tax foreclosure laws, and no more. Such a deed notifies the buyer that title might be clouded.
Quitclaim Deed Requirements
Each state's laws contain specific requirements for completing a quitclaim deed. Most every state requires the following information on the document:
- grantor and grantee names
- legal description of the property
- county name where the property is located
- signature of a notary public, and
- grantor’s signature.
In some states, the grantee must also sign the quitclaim deed. A few states, such as Florida and Georgia, also require the signatures of witnesses before the deed can be recorded.
After completing a quitclaim deed, it must be filed in the land records office in the county where the property is located (sometimes called the recorder or county clerk).
Quitclaim Deeds Are Not Reversible
Once a quitclaim deed has been signed and delivered, the grantor no longer owns the property. The transfer is final and cannot be reversed unless the grantee “quitclaims” the property back. If the grantee (person who received the property) doesn’t agree to this, the grantor must prove the transfer was invalid by showing that the deed was signed under threats, external pressure or because the grantee lied.