Do you want to use a quit claim deed but are unsure if you should? Then this article is for you. Quit claim deeds are unique legal instruments that allow for the transfer of property ownership, and it is important to understand their distinct characteristics, and most importantly, when it is appropriate to use one.
Here is what you need to know:
Demystifying the Quit Claim Deed
A quit claim deed is a legal document that transfers ownership of real property from one person to another. Unlike other types of deeds, a quit claim deed makes no promises or guarantees about the title of the property. In essence, the person transferring the property (the grantor) is saying, “I am giving up any claim I might have to this property without making any guarantees about what those rights might be.”
It is important to understand that a quit claim deed only transfers the grantor’s interest in the property, whatever that interest may be. If the grantor has no ownership interest, then the quit claim deed transfers nothing. This is why quit claim deeds are typically used in situations where the parties involved know and trust each other, and where there is no dispute over ownership.
Quit Claim Deeds vs. Warranty Deeds: What is the Difference?
To understand when to use a quit claim deed, it is helpful to compare it to warranty deeds. There are two types of warranty deeds:
- General Warranty Deed: This type of deed provides the highest level of protection for the buyer. It guarantees that the seller owns the property free and clear of any liens, claims, or other encumbrances.
- Special Warranty Deed: This deed offers less protection than a general warranty deed. It only guarantees that the seller has not created any title defects during their ownership of the property. In other words, it does not protect the buyer from claims that may have arisen before the seller owned the property.
In contrast, a quit claim deed offers no warranties or guarantees whatsoever. It simply transfers whatever interest the grantor has in the property, without making any promises about the quality of that interest.
When Does a Quit Claim Deed Make Sense?
As mentioned above, quit claim deeds are best suited for situations where there is a high level of trust between the parties involved and where there is no money changing hands. Here are some common scenarios where a quit claim deed may be appropriate:
- Transfers Between Family Members: A parent may use a quit claim deed to transfer property to a child as a gift or as part of estate planning. Siblings may use one to transfer property to each other to simplify ownership.
- Divorce Settlements: Quit claim deeds are often used in divorce settlements to transfer ownership of the marital home or other real property from one spouse to the other.
- Adding or Removing a Spouse from a Title: A quit claim deed can be used to add a spouse to a property title after marriage or to remove a spouse from a title after divorce.
- Clearing Up Title Issues: If there is a minor error in a property title (like a misspelling of a name or an incorrect legal description), a quit claim deed can be used to correct it.
- Transferring Property to a Trust: Quit claim deeds are often used to transfer property into a living trust as part of estate planning.
When Should You Avoid a Quit Claim Deed?
Quit claim deeds are not suitable for traditional real estate sales where the buyer is paying money for the property. This is because the quit claim deed offers no protection to the buyer regarding the title of the property. If you are buying property, you need the protection of a warranty deed to ensure that you are getting a clear title.
A Word of Caution
Quit claim deeds are powerful legal instruments. If you are considering using one, it is crucial to consult with an experienced attorney who can explain the risks and benefits and ensure the deed is properly prepared and executed. An attorney can also help you determine whether a quit claim deed is the right tool for your specific situation.
Looking to Use a Quit Claim Deed? I Can Help You
If you are facing a situation where a quit claim deed might be appropriate, or if you have any other real estate legal needs, do not hesitate to reach out to me.
You can call me at (305) 921-0976, email me at [email protected].