What is a Quitclaim Deed and Why Would I Need One?

Photo by realtor.com

When you purchased your home or condo, you signed and received a deed showing proof of ownership. The two most common deeds are a warranty deed and a quitclaim deed. A general warranty deed offers the most protection for a new owner, so why would one ever need to get a quitclaim deed?

First, let’s look at what a general warranty deed provides. As this realtor.com article shares, a general warranty deed says that the grantor, previous owner, is the owner of the property and has the right to transfer the property to the new buyer, the grantee. In addition, the deed serves as a statement that there are no liens against the property from a mortgage lender, the Internal Revenue Service, or any creditor, and that the property cannot be claimed by anyone else. Title insurance further provides the financial backup to the warranty deed, and requires a title search to verify that no other claims, encumbrances, easements, or liens on the property are outstanding.

A quitclaim deed is used when a real estate property transfers ownership without being sold. No money is involved in the transaction, no title search is done to verify ownership, and no title insurance is issued. A quitclaim deed impacts only the ownership of the house and the name on the property deed or title, not the mortgage.

Common reasons to use a quitclaim deed:
-Real estate transaction between family members
-Owner gets married and wants to add the spouse’s name to the title or deed
-Owner gets divorced and wants to remove one spouse’s name from the title or deed
-Parents transfer property to their children
-Siblings transfer property to each other
-A family or party opt to put their real property into a family trust
-Title insurance uncovers an additional owner of a real property and wants to make certain this person does not make a future claim to the property.

We always suggest hiring an attorney to handle these types of issues. Quitclaim deeds must be in writing to be valid, with information including the property, date of transfer, location, and the names of those involved (grantor and grantee). This type of document is typically notarized to be valid and filed with the county clerk where the property is located.