WAIT, It's a Quick Claim Deed right?
It would seem like finding a real estate vocabulary word that starts with “Q” would be a bit difficult. Good news! It was the easiest one so far as there is only one that is important enough to cover. Have you ever been the grantor or the grantee in a quitclaim deed? Funny thing, most people call it a quick claim deed. Its quit, not quick. I assume its confused often because it is a quick way to change a title document, or maybe its because people don’t enunciate it well enough. Either way, lets dive in.
Its called a quitclaim deed because the owner/grantor terminates (“quits”) any right and claim to the property, as a result the right or claim to transfer to the recipient/grantee.
Due to the lack of warranty, quitclaim deeds are most often used to transfer property between family members, as gifts, placing personal property into a business entity (and vice versa) or in other special or unique circumstances. An example Wikipedia uses for a quitclaim deed is in “divorce, whereby one spouse terminates any interest in the jointly owned marital home, thereby granting the receiving spouse full rights to the property. For example, when one spouse acquires the marital home in a divorce settlement, the other spouse could execute a quitclaim deed eliminating their interest in the property and transferring full claim to the other spouse, quickly and inexpensive.”
First and foremost, some key facts about a quitclaim deed:
- Know and trust your grantor!
The grantor only "remises, releases and quitclaims" his or her interest in the property to the grantee. There are no warranties or promises regarding the quality of the title.
- This type of deed has the least amount of protection
Called a non-warranty deed, a quitclaim deed conveys whatever interest the grantor currently has in the property if any. The grantor only "remises, releases and quitclaims" his or her interest in the property to the grantee. There are no warranties or promises regarding the quality of the title.
- Risky, but as effective as a warranty deed
There is no legal recourse if the title is defective. A quitclaim deed can convey title as effectively as a warranty deed if the grantor has a good title when the deed is delivered. It is the lack of any warranties, however, that make a quitclaim deed less attractive from a grantee's perspective.
- Doesn’t affect the mortgage
Due to this, quitclaim deeds typically are not used in situations where the property involved has an outstanding mortgage. After all, it would be difficult for many grantors to pay off a mortgage without proceeds from the sale of the property.
- Can help clear title defects
A quitclaim deed is often used to cure a defect (a "cloud on the title") in the recorded history of a real estate title. Title defects include items such as issues with wording (for example, on a document that does not comply with state standards), a missing signature (such as that of a spouse) or failure to properly record real estate documents. For example, if the name of a grantee is misspelled on a warranty deed placed in the public record, a quitclaim deed with the correct spelling can be executed to the grantee to perfect the title.