Quitclaim deed: What it is, how it works, and when to use one

Transferring a property to someone else doesn’t have to be complicated. A quitclaim deed is a simple legal document that lets you hand over your ownership interest, whether you’re giving a home to a family member, adding or removing a name from the title, or clearing up a title issue. Because it’s usually fast and inexpensive, it’s a popular choice, but it also comes with no guarantees about the title, so it’s important to know when it’s the right tool.

Key takeaways:

• Transferring ownership in a home typically requires a deed.
• Quitclaim deeds are quick and easy ways to transfer ownership to another person.
• Quitclaim deeds do not offer title guarantees or other protections and may not be a good choice for some types of real estate transactions.

What is a quitclaim deed and how does it work?

A quitclaim deed is a simple legal document that transfers a property owner’s rights to another person. The owner transferring the rights is legally known as the grantor, while the person receiving the property is the grantee.

While it’s quick, a quitclaim deed provides limited legal protection and no guarantee of quality. A quitclaim does not even guarantee or represent that the grantor is the property owner. Therefore, a quitclaim deed is recommended only in specific situations.

Consult a real estate attorney to ensure everybody’s interests are represented with a quitclaim deed. A title insurance policy is another way to ensure there are no complications with the title transfer process.

Grantor vs. grantee

When a quitclaim deed is used to transfer ownership of a home between two parties, those parties are called the grantor and grantee.

The grantor is the current owner of the property who is transferring it to a new owner. The grantee is the party who is receiving ownership from the grantor.

What rights and protections transfer

A quitclaim deed does not include any protections or guarantees regarding title in the property. It simply transfers any ownership interest the grantor has to the grantee.

If the grantor’s interest in the property is flawed, such as due to competing title claims, the grantee does not automatically receive clean title. They will have to deal with the same competing interests.

Quitclaim deed vs. warranty deed

A warranty deed is another legal document that transfers ownership of a property. It differs from a quitclaim deed in that it guarantees the property is free of liens, encumbrances, and other title claims.

Warranty deeds provide more protection for the grantee than quitclaim deeds. They allow sellers to be confident that the transaction will go smoothly.

For example, if you want to buy a home, a warranty deed protects you from the previous owner’s unpaid property taxes. As a result, warranty deeds are the standard for real estate transactions.

General warranty deed

A general warranty deed is a type of deed that offers more protection for the grantee. By offering a general warranty deed, the grantor guarantees a clean chain of title for the entire history of the property.

If the grantee later finds that the grantor did not hold clear title to the property, they can seek legal remedies from the grantor.

Special warranty deed

A special warranty deed offers protections like those offered by a general warranty deed, but with some limitations. Rather than promising clean title throughout the history of the property, it only makes this guarantee for the time that the seller has owned the property. Title problems that arose prior to when the grantor purchased the property are not covered.

When should you use a quitclaim deed?

While a warranty deed is appropriate for real estate transactions between two unrelated parties, there are scenarios where a quitclaim deed may be preferable.

Family and relationship changes

Using a quitclaim deed can be helpful if you want to gift a house to a family member. Presumably, your family member trusts you and does not need the protection offered by a warranty deed.

It can also come up when a relationship changes. For example, if you buy a house without your spouse, you may later want to add their name to the title, and a quitclaim deed is a common way to do that. It can work the other way, too. In a divorce, one ex–spouse often uses a quitclaim deed to give up their interest in the home, though they may still need to remove their name from the mortgage.

Estate planning, trusts, and LLCs

Some people opt to transfer their homes to LLCs, trusts, or other legal structures for liability or estate planning purposes. Because you’re maintaining ownership of the home, just through a new legal structure, a quitclaim deed is effective here.

Correcting title errors

Sometimes, a title may have errors such as a misspelled name or a missing signature. A quitclaim deed can help resolve the issue without affecting your mortgage or ownership status.

What are the benefits and risks of a quitclaim deed?

Here are a few of the pros and cons of using a quitclaim deed:

Benefits of a quitclaim deed

Some benefits of quitclaim deeds include:

• Efficient and straightforward transfer. A quitclaim deed requires minimal paperwork and can usually be completed more quickly than other deed types.
• Cost–effectiveness. Quitclaim deeds are usually cheaper to prepare and file than other types of deeds.
• Ideal for family transfers or avoiding probate. Quitclaim deeds are well–suited for transferring property to a family member or a related party. They can help transfer property without going through probate if the owner dies and leaves it to an heir.
• Potential gift tax benefits. If the ownership transfer qualifies as a gift, it may fall under the annual gift tax exclusion. This can reduce or eliminate the giver’s tax liability. The person receiving the home generally takes on the giver’s cost basis, which can affect the capital gains taxes they owe when they sell.

Title, lien, tax, and legal risks

Quitclaim deeds come with some risks and downsides, including:

• No title warranty or guarantee. A quitclaim deed only affects the grantor’s own ownership interest in the property. It provides no promise that the title is clear.
• Risks for the grantee. The grantee becomes responsible for any existing liens, claims, or title defects. This can lead to unexpected financial or legal issues.
• Implications for existing mortgages. Transferring real property with a quitclaim deed does not remove the original borrower from the mortgage. It also can trigger an alienation clause or a due–on–sale clause in some cases.
• Limited uses. Quitclaim deeds are best for simple, low–risk transfers and are not appropriate for most real estate sales. They offer fewer protections than other deed types.

Why a quitclaim deed does not remove a mortgage

It’s important to note that a quitclaim deed does not remove a mortgage from a home or the obligation to pay your monthly mortgage bill. If you’re trying to get out of a mortgage, a quitclaim deed won’t help.

All a quitclaim deed does is change the ownership of a property. The person who took out the mortgage maintains that obligation to the lender even if they give up their claim on the home.

One thing to keep in mind before using a quitclaim deed to transfer ownership in a home is that doing so may trigger an alienation clause or a due–on–sale clause in some cases.

How to transfer property through a quitclaim deed

The process for transferring property through a quitclaim deed varies depending on where the property is located. States, counties, and municipalities often set their own rules, processes, and fees. Make sure to learn about the laws in your area.

Most quitclaim deed forms will require that you fill out the following information:

• Identification of the grantor and grantee, as well as their addresses
• A listing of the property and a definition of the transaction as a quitclaim
• The date and relevant signatures
• Terms of the transaction
• The state where the grantee receives the property from the grantor

After filling out the form, you typically pay a recording fee to have it entered into the public record. Quitclaim recording fees in many areas are less than $100. If you hire a lawyer to prepare the deed, or if your state requires a notary, that will cost more.

How to transfer property through a quitclaim deed

If you want to transfer ownership in a property using a quitclaim deed, follow these steps.

Step 1: Prepare the quitclaim deed form

The first step is to prepare the quitclaim deed that will be used to transfer ownership. You can find example forms online or work with a real estate attorney who can provide the paperwork.

The form will require some key information, such as the name and address of the grantor and grantee, the address and a description of the property, and a description of the transaction occurring.

The precise outline of the document and the information required may vary from state to state, so consider consulting an attorney who can walk you through the process.

Step 2: Sign and notarize the deed

The next step is for the grantor to sign the quitclaim deed. Depending on state law, the grantor may need to sign the deed in front of a notary who can confirm their identity and that the document was properly signed. Even in states where notarization is not required, working with a notary can help reduce the risk that someone will argue the deed was not properly signed or is otherwise unenforceable.

In some states, the grantee may also need to sign the deed in front of a notary.

Step 3: Record the deed and pay required fees

After the deed is signed and notarized, it needs to be filed with the county recorder or clerk’s office. When you file, you’ll need to pay a filing fee, but this is usually about $100 or less. Keep in mind that some notaries may also charge for their services.

Once the deed is filed and recorded, ownership transfers to the grantee.

How can you change or nullify a quitclaim deed?

Once a deed is filed and recorded by your local government, it is usually considered final and cannot be changed or nullified unilaterally. However, there may be some options if you need to change or undo a quitclaim deed.

Create a new deed by agreement

The simplest method for changing a quitclaim deed is for the parties involved to draw up a new quitclaim deed that makes the desired adjustments, such as transferring ownership back to the original grantor.

This will require new paperwork, notarization, and recording with the government.

Address fraud, undue influence, or capacity concerns

Quitclaim deeds transfer ownership from the grantor to the grantee, but they may not be enforceable if the grantor has been improperly influenced or is no longer legally capable of making their own financial decisions. In some cases, outright fraud where someone forges the grantor’s signature can occur.

If you believe a quitclaim deed should be nullified due to fraud, influence, or incapacity, you should consult a local real estate lawyer who can help walk you through the process of going to court to argue that the deed should not be enforced.

File a quiet title action

A quiet title action is a legal proceeding that can be used to determine the proper owner of a property. In effect, the party submitting the quiet title action brings a lawsuit against anyone else who has a claim to the property.

The court then considers the facts brought forward by each party and assigns title to the proper owner. If there are multiple competing claims, quiet title actions can override quitclaim deeds if the grantee’s claim is not found to be valid, for example because the grantor did not have proper title in the first place.

FAQ

Here are answers to common questions about quitclaim deeds.

How quickly does a quitclaim deed transfer ownership?

As a rule, a quitclaim deed is considered legal and effective once it’s been signed by the grantor and accepted by the grantee. In some cases, the grantee also may need to sign the deed. The deed must then be filed and recorded with the county clerk’s office as soon as possible. Otherwise, the grantee may face challenges to their ownership.

How long is a quitclaim deed good for?

A quitclaim deed is considered a permanent transfer of ownership between the grantor and grantee, so there’s no limit to the term of ownership. However, the deed needs to be filed with the county recorder’s office to be officially recorded. If you don’t file a deed with your county recorder’s office, you may end up with a legal challenge from another claimant later.

What happens if someone refuses to sign a quitclaim deed?

In most cases, if someone refuses to sign a quitclaim deed, there is no way to force them to do so. However, one of the most common scenarios where this comes up is after a divorce. If one spouse has been ordered to sign a quitclaim deed as part of a court order but refuses, they may face legal consequences. Refusing to sign a quitclaim deed in this scenario delays the transfer but cannot prevent it.

Does a quitclaim deed override a will?

Yes, in most cases, a properly executed and recorded quitclaim deed can override the instructions in a will. Timing is important here. If a quitclaim deed is executed before the owner dies, it is no longer part of the estate. Therefore, any instructions in the will pertaining to the property are no longer valid, since it is owned by the grantee of the quitclaim deed.

Do you need a quitclaim deed lawyer?

While you don’t technically need a lawyer to file a quitclaim deed, real estate law can be complex and varies from state to state. It’s a good idea to work with a lawyer who can advise you through the process of drawing up and filing a quitclaim deed. They may also be able to assist you with finding title insurance, which can protect the grantee from future competing claims to the home.

Can you get a quitclaim deed form from Staples?

While you may be able to get a quitclaim deed form from Staples or another business, keep in mind that deed requirements vary by jurisdiction, so you’ll need to verify that it meets your local requirements for things such as property description, signatures, and notarization.

The bottom line: Know when a quitclaim deed is right for your property transfer

A quitclaim deed is a legal document that transfers a grantor’s ownership interest in a property to a grantee. It’s often used to move property between family members, add or remove a spouse from a title, or transfer a home as part of a divorce. It can also help resolve certain title issues, such as removing a name or releasing a claim.

A quitclaim deed doesn’t guarantee that the title is free and clear, and the grantee has little recourse if problems surface later. That’s why quitclaim deeds may not be a good fit for most typical real estate transactions, like buying or selling a home on the open market. Before you sign one, it’s worth talking with a real estate attorney, title professional, or real estate expert to make sure it’s the right choice for your situation.

If you want to buy rather than transfer a home via a quitclaim deed, you can explore your borrowing options today with Rocket Mortgage.