Quitclaim deed: A complete guide

Transferring ownership of a property or home doesn't need to be complicated. If you're giving your property to an heir, adding or removing a name from the title, or addressing a property title issue, a quitclaim deed can quickly and cheaply achieve your goal.

What is a quitclaim deed on a property?

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.

How do quitclaim deeds differ from warranty deeds?

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.

A general warranty deed guarantees a clean chain of title for the entire history of the property, while a special warranty deed only makes this guarantee for the time that the seller has owned the property.

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.

When should you consider 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.

• Transferring property between family members. For example, you can transfer your home's title to your child without them needing a mortgage. As a result, quitclaim deeds are helpful when gifting real estate to family members.
• Transferring property during a divorce. When one spouse is keeping the house in a divorce, removing the name of the other spouse is an important step. Many people use a quitclaim deed because it's a quick, affordable solution to settle divorce obligations and give up one’s property interest.
• Adding or removing a spouse’s name. If you buy a house without your spouse, you may wish to add their name to the title later on. Credit concerns may also lead you to add your spouse's name to the title after obtaining a mortgage without them, or to remove their name before refinancing to secure a better interest rate and terms.
• Fixing title errors. If your title has an error, 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 pros and cons of using a quitclaim deed?

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

Pros

• 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.

Cons

• 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.

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 do you nullify a quitclaim deed?

If a quitclaim deed is properly executed and recorded, it cannot be nullified.

If you’re looking to nullify or change a quitclaim deed, the easiest way is for both parties to agree to a new quitclaim deed. If the parties don't agree on this, nullifying a quitclaim deed becomes more complicated.

Some scenarios where you might want to nullify a quitclaim deed are if you find that someone has fraudulently signed or recorded a quitclaim deed on property that you own, there was undue influence on the grantor, or the grantor’s mental or physical capacity is in question.

If that's the case, you may need to file a legal claim, such as a quiet title action, to transfer the property back into your name. Consider consulting with a real estate attorney if this is the case.

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 on.

Can I use a quitclaim deed to get out of my current mortgage?

Quitclaim deeds don’t protect grantors financially. For example, if you transfer a property using a quitclaim deed, you remain responsible for any mortgages and liens against the property. If you’re looking to get out of your current mortgage, a quitclaim deed will not help you. Instead, you'll need to explore other options, such as working with your lender, selling your home, or letting your home go into foreclosure.

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.

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 property rights to a grantee. They often are used when transferring property between family members or divorcing spouses. Additionally, they can fix any defects on your title. However, because quitclaim deeds don't guarantee the title is free and clear, they aren't suitable for most typical real estate transactions.

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

Refinancing may increase finance charges over the life of the loan.

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