A quit claim deed is a type of deed where a person (grantor) with an ownership interest in a property transfers that interest to another person (grantee). The grantor offers no guarantees about the title to the grantee recipient. Don't confuse a quit claim deed with the type of deed that is normally used to transfer title to real estate. That is most often a grant deed or a warranty deed. Those deeds transfer title with some guarantee that the title is legal and valid.
You sometimes hear a quite claim deed erroniously called a "quick claim deed".
A quit claim transfers only the rights of the person signing the deed. It does not guarantee that other people don't have an interest in the property. If there are other owners, their ownership is not affected by the quit claim.
You will find that a quit claim deed is most often used to clear up problems with a title or when someone wants to use a simple method to give up all interests in a property. Quitclaim deeds are sometimes used by a divorcing couple, where one spouse signs all his/her rights to their home over to the other.
It is not uncommon that when a property is being sold a title search finds that a mistake has been made in the past and a previous owner never relinquished his ownership in the property. That puts a "cloud" or "defect" on the title. The problem is solved by contacting the previous owner and asking him/her to sign a quit claim deed.
The title company is usally the one who makes the call when a quit claim deed is needed from a prior owner. Most transfers of property involve morrtgage loans. When there is a cloud on title the quict claim dded is necessary to insure the lender of a first lien position if the borrower does not make payments according to the note. The lender cannot enforce a trustee sale (non-judicial foreclosure) against someone whose name is not on the note, the that name is on title.
If that person will not sign the quict claim deed to release their itnerest in the property the sale probably will not close. At the very least the close will be delayed while other actions are taken to complete the sale.
Quit Claim Deed Definition
This conveyance is frequently used between divorcing partners and family members. The conveyor, or person claiming the rights to the real estate, transfers all claims and rights to the receiver. The quit claim deed does not guarantee that the conveyor has the legal rights to the real estate, just conveys claims and interests.
To be legally binding, the quit claim deed must be in writing, signed by all parties and recorded so that creditors or future purchasers of the property have notice of the transfer. This is best done by having a legal quit claim deed written, signed and notarized then filed in your local county or parish courts. A legally binding quit claim deed is required in all 50 states with few variances. Local ordinances or an attorney can advise of the particular aspects of the deed that must be present in your state. A handshake and a gentlemen's agreement will not provide the legal basis for a quit claim deed. The statue of frauds requirement makes oral or other type agreements unenforceable. In other words, "Get it in writing."
Since this type of deed transfer gives the receiver the rights to the real estate and the conveyor gives up the rights to the real estate, does this mean that the creditor has to honor this deed transfer? No, not necessarily. If you are simply saying your spouse no longer has interests in the property and there is no actual sale of the property, the creditor has the right to hold all original parties accountable to the loan. In other words, if you file this in the local courts and the person receiving the property does not pay the loan, the creditor can come to you for payment. Unless it is a sale, approved by the financial institution, the quit claim deed is just a transfer of rights but not a release of financial responsibility. To be financially free of the real estate, further documents are required.
The quit claim deed is a wonderful tool for property that is owned free and clear. This type of deed is an excellent means of transferring real estate between family members such as in a division of an estate before the owner expires. The deed can be legal with or without the purchase of real estate. In other words, a person can donate, or sell these rights to the property for a price using a quit claim deed.
Both Mark Walters & Gen Wright are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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