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What is a Quitclaim Deed?
A quitclaim deed refers to a type of property deed used by a grantor to transfer his interest in a property to a grantee without giving any assurance about the property's clear title. However, this deed states that the grantor will no longer hold any interest in the property.
Using quitclaim can invite high risk. It offers minimal protection to the buyer, so it is more suitable when produced between trusted parties, such as family members. At the same time, quitclaims are legal documents that smooth the property transaction process.
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- Quitclaims deed refers to a type of property deed signed by the seller (grantor) to transfer his interest in the property to the buyer (grantee) without providing any warranties.
- It is a non-warranty deed, does not guarantee a clear title, and provides the least protection to the buyer; hence it is risky.
- It is commonly used whenever a transfer occurs between family members or close relatives, ensuring a smooth and easy transfer process without any delays.
- A grant deed is different, it guarantees a clear title, and the buyer gets relatively higher protection.
Quitclaim Deed Explained
A quitclaim deed is a formal release of interest in a property, stating a clear exit to ensure that its title can be further utilized by someone else. The two parties involved are the grantor and grantee; signing the quitclaim grantor transfers his legal interest in the property specified to the grantee, given no warranty is involved. It is one of the easiest ways to transfer the title positively when it is good or free and clear of all liens and liabilities.
It is a non-warranty deed. The absence of a warranty ascertaining the grantor's ownership generates a high risk for the grantee and provides the least protection to the grantee/buyer. In addition, it affects the provision to sue the grantor if a breach of the contract happens or any fraudulent activity from the grantor side is identified in the future. So, this type is usually formed between entities with a high level of trust like family members and where no significant cash transaction is involved, when real estate-owned property or bank-owned property is involved, etc. Furthermore, the grantee is not liable to pay off or settle the mortgages taken by the grantor using the property.
Quitclaim Deed Examples
- Anna transfers one of her properties to John using a California grant deed form. After a month, Anna quitclaims her interest in the same property to Emma by California quitclaim deed form. Here, John received the title through the grant deed form before Emma, implying that Emma has no legal right to the property. If Emma had received a grant deed form, she would have a legal claim against Anna for breaching the warranty of title. Unfortunately, Emma received a non-warranty deed and can have no legal recourse against Anna.
- Quitclaims are not uncommon in fraudulent real estate transactions because of no mandatory title examination process. Once, in Los Angeles County, a man regrettably became a victim of a scam that targeted homeowners. The man had listed his house online to rent and was about to sell it later. A scammer noticed the advertisement and understood that the house was vacant. The scammer became an imposter and recorded and signed the quitclaim deed by fooling the notary. This way, a scammer can sell the property, rent it out, or obtain a loan.
- A father has two sons; the eldest son is doing well financially, while the other is just making enough money to meet the ends. After the father's death, the eldest son decides to submit a quitclaim so that the land owned by his father can successfully be transferred to his younger brother so that he will have enough assets. It is a simple example of how family members commonly use it to transfer property titles.
Quitclaim Deed vs. Grant Deed
Let's look into how the quitclaim deed is different from another type of property deed called a grant deed.
| Quitclaim Deed | Grant Deed |
|---|---|
| Does not guarantee a clear title | Guarantees a clear title |
| The grantor is not responsible for any unknown future ownership claims | The grantor is responsible for any unknown ownership claims that may arise in the future |
| It will be difficult for the grantee to sue the grantor if any fraudulent activity from the grantor side emerges | The grantee can sue the grantor if a breach of warranty happens |
| Commonly used by family members and joint owners with a high degree of trust and when no significant cash transaction is involved | Common among unrelated entities |
Frequently Asked Questions (FAQs)
It's a type of property deed which comes with no warranty. It gives the grantee whatever interest the grantor has in the property when the deed is signed and delivered. It makes no promises about whether the current owner has clear title to the property.
In California, it is common when the property is being transferred as a gift between family members, settlement occurs between spouses during divorce, adding a party to a deed, removing a party from the deed, etc. Form filling is followed by notarizing it, submitting the form along with a documentary of transfer tax, a notice of the exempt transaction, preliminary change of ownership report. Furthermore, the cost of filing starts at around $15.
In Florida, it is valid only if the grantor has a clear or clean title, free from liens and liabilities. If the seller does not have good legal title to the property, the deed will become ineffective. It is commonly seen in transactions associated with LLCs, trusts, and property transfers between family members.
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This has been a Guide to What is Quitclaim Deed. We explain its definition, examples, quitclaim deed form in California and Florida, and vs. grant deed. You can learn more from the following articles -
