Understanding Quitclaim Deeds: Key Information
Learn the key aspects of understanding Quitclaim Deeds. Find out what legally and financially it means to transfer property ownership and answer all your questions with this helpful article.
What is a Quitclaim Deed?
A quitclaim deed is an instrument that is used when one person (the grantor) transfers whatever ownership they may have in a piece of real estate to another person (the grantee). The specific language of the deed states that the grantor is relinquishing any ownership they may have in the real estate owned by them, and implies that title may exist or not, based on the particular facts of the transaction.
What are the Elements of a Quitclaim Deed?
The elements of a quitclaim deed will vary from state to state, however generally they are the same. Generally, the deed must include the grantor's name and address, the grantee's name and address, legal description of the property, grantor's signature, date of transfer, and appropriate notary acknowledgements, if required. In addition, some states may also require an affidavit of non-taxability and/or a statement from the grantor that they are not subject to any pre-existing liens on the property.
When Should a Quitclaim Deed Be Used?
Quitclaim deeds are most commonly used between family members, such as between a parent and child, a husband and wife, siblings, or friends. It is also often used when a grantor wishes to add or remove someone from a deed. A quitclaim deed is also often used when an error has been made on a previous deed, such as a misspelling of a name. In these instances, the error can be corrected with a quitclaim deed.
What are the Benefits of a Quitclaim Deed?
The primary benefit of a quitclaim deed is that it is fast and inexpensive. Compared to a warranty deed, a quitclaim deed does not offer the same level of assurance that the title to the property is valid and clear, but it is less expensive and time-consuming to execute. Additionally, there are no taxes or fees associated with a quitclaim deed, thus making the transfer of real estate more affordable.
What are the Risks of a Quitclaim Deed?
The primary risk of a quitclaim deed is that it does not guarantee clear title. A quitclaim deed does not include any warranties or guarantees that the grantor has title or ownership of the real estate or that the title is clear from encumbrances. Thus, the grantee may accept the property without knowing something that could jeopardize their ownership rights, such as liens by other parties. It is important to note that even though a quitclaim deed may not provide the same level of assurance as a warranty deed, it is still legally binding and the transfer must be properly recorded in order for it to take effect.
Conclusion
A quitclaim deed is a useful tool when a person wishes to transfer their ownership interest in a piece of real estate, often quickly and inexpensively. While there are several benefits of using a quitclaim deed, it is important to understand that this type of deed does not provide the same level of assurance as a warranty deed and may not guarantee a clear title. It is thus wise to seek the advice of a qualified attorney to ensure all requirements are met and the transaction is properly recorded.