Quitclaim Deed

How a Quitclaim Deed Works

A quitclaim deed passes the prior owner’s interest in real estate to the new owner, but makes no guarantees that the owner has an interest in the property or has good title to the property. When property is transferred by quitclaim deed, the person who receives the property (grantee) gets whatever title the transferor (grantor) has.  But the grantor is not responsible if there are any problems with the title (or if it turns out that the grantor did not have title at all).

If the prior owner has title to the property, the quitclaim deed will transfer title to the grantee named in the deed. But if the prior owner did not own the property—or if the prior owned the property, but there are issues with title—there is nothing that the grantee can do. Because there is no warranty of title, the grantee cannot sue the grantor for failure to convey clear title.

Other Names for Quitclaim Deed Forms

The terms quitclaim deed and quit claim deed are interchangeable. A quitclaim deed may be properly referred to by that name or with spaces between (quit claim deed). Some state laws have a preference for one form over the other, but both are technically correct.

Some laypeople call a quitclaim deed a quick claim deed, but this is based on confusion and is always incorrect. There is no such thing as a quick claim deed.

Some states recognize another form of deed—called a deed without warranty or no warranty deed—that is the functional equivalent of a quitclaim deed. Like a quitclaim deed, this type of deed provides no warranty of title. Deeds without warranty are discussed below.

Relationship of Quitclaim Deed Form to Other Forms of Deeds

The distinguishing feature of a quitclaim deed is the lack of a warranty of title. With a quitclaim deed, the grantor makes no assurances. The grantee simply takes whatever title the grantor has. The grantor is not liable if the title is defective. This lack of liability distinguishes quitclaim deeds from other types of deeds, such as warranty deeds or special warranty deeds.

• With a warranty deed (also called a general warranty deed), the grantor guarantees that he or she has clear title to the property. This warranty covers both the period when the grantor owned the property and the period before the grantor owned the property.
• A special warranty deed (depending on the state, also known as a grant deed, covenant deed, or limited warranty deed) guarantees that the grantor has done nothing to encumber the title to the real estate, but makes no promises about what may have happened before the grantor owned the property.

Because of the lack of a warranty of title, a quitclaim deed places all of the risks on the grantee.

Quitclaim deeds can also be distinguished from other forms of deeds that are named after features other than the warranty of title. These deeds include life estate deeds, lady bird deeds, and transfer-on-death deeds. Each of these other types of deeds is commonly used to avoid probate. The names given to these other types of deeds do not relate to the warranty of title. This means that the same deed may be properly called by two names. For example, a lady bird deed may also be a quitclaim deed.

Quitclaim deeds are often used in most states to transfer real estate. But in a few states—including Texas and North Carolina—title companies disfavor quitclaim deeds. In those states, it is usually best to use a deed called a deed without warranty or no warranty deed. This deed form does the same thing as a quitclaim deed: It transfers title without responsibility to the grantor. But it uses different language that makes it clear that a transfer is taking place. This small semantic distinction can be important in the few states that disfavor quitclaim deeds.

Common Uses of Quitclaim Deeds

Quitclaim deeds are common where there is a preexisting relationship between the transferee and the transferor or when no money is changing hands (when the transfer is without consideration). People often use quitclaim deeds to:

• “Take someone’s name off” of a deed or adding a person to the deed;
• Transfer heir property (or other property inherited from a deceased owner) between family members;
• Transfer of real estate from a person to a business owned by that person; and
• Make a gift of property from one person to another.

Quitclaim deeds are often used to remove an ex-spouse from a deed after a divorce. Most spouses own their homes jointly, meaning that both of them are listed on the deed to the home. In a divorce proceeding, the settlement agreement often requires one spouse to convey his or her interest in that home to the other spouse, so that only one spouse will own the home after the divorce. A quitclaim deed is usually used to eliminate one spouse’s interest in the home.

Because the grantee has no assurance he or she is getting clear title to the real estate, quitclaim deeds are seldom used in commercial settings. If a person is buying property in an arm’s length transaction, the buyer will want at least some warranty of title. Because of this, most sales of real estate will use a warranty deed or special warranty deed instead of a quitclaim deed.

How to Create a Quitclaim Deed

Depending on the state, quitclaim deeds may be authorized by a specific statute or derived from common law. If the deed is based on a statute, the statutory authority will usually give the correct language to use in the granting paragraph. Other laws and customs that apply to transfers of real estate require additional information.

In addition to using the correct vesting language, a quitclaim deed must include a valid legal description, statement of consideration, and a description of the manner in which co-owners will hold the title. The quitclaim deed must also meet recording requirements—which often have specific font sizes, margins, and other formatting requirements—and signature and notarization requirements.

Special care must be taken to ensure that the deed is actually a quitclaim deed and not one of the other forms of deeds. This requires state-specific language to be included in the deed. This language is often very similar to the language used in other forms of deeds. Failure to include the right language can result in an inadvertent warranty of title or create future title issues that can only be resolved by a court.