A quitclaim deed is a legal document that transfers ownership of a real estate property from one party to another. A quitclaim deed doesn't guarantee that the grantor or signer has any right to the property. It only states that they won't claim it in the future. Better protections are available through a general warranty deed or special warranty deed. Read on to understand what a quitclaim deed is and when you need one for transferred real estate.
What Exactly Does a Quitclaim Deed Do?
A quitclaim deed transfers the ownership interest or claim that a person has in a property to another person without making any guarantees or promises about the title.
You might encounter three types of deeds: general warranty, special warranty and quitclaim. All three function slightly differently in whether there is a warranty about the property and in what the grantee receives. With a quitclaim deed, as the name implies, the grantor "quits" their "claim" to the property, thereby forfeiting any right to claim title or ownership in the future.
What’s the Difference Between Quitclaim and Warranty Deeds?
The basic difference between a warranty deed and a quitclaim deed is in what is or is not guaranteed. In both deeds, the grantor makes a different legal statement. In a quitclaim deed, the grantor makes no promise or warranty.
In a warranty deed, there's also a promise by the grantor called a warranty, which states that the seller owns the property and that it hasn't been sold to another party. There are two types of warranty deeds, a general warranty and a special warranty, which differ in function.
General Warranty Deed
With a general warranty deed, the seller guarantees that the property hasn't been sold to another party. The general warranty states that there are no other legal claims on the property's title. It also certifies that the property is free of liens and no debts were discovered during the probate process.
A general warranty deed protects you as the buyer. For most real estate transactions, this is the most clear option to ensure that the property is free of debts or liens and the seller has the legal right to sell.
Special Warranty Deed
A special warranty deed is more specific and doesn't offer the same broad coverage as a general warranty deed. With a special warranty deed, the seller guarantees that no liens or debts occurred while the current seller owned the property. It makes no claims about title issues or debts incurred under previous owners. In this way, the seller makes no guarantees or promises regarding previous claims or title issues. For these reasons, a special warranty deed is limited and doesn't offer the same comprehensive protection as a general warranty deed.
When to Use a Quitclaim Deed?
A quitclaim deed is simpler than either a special warranty deed or a general warranty deed. It makes no guarantees about the ownership or title of the property and simply relinquishes claims to the property.
You might need a quitclaim deed when transferring property among family members, adding or removing a spouse from the title because of marriage, divorce, or any situation where you want to transfer your interest rather than go through a traditional sale. Other examples where families might use a quitclaim deed:
- If parents want to transfer their property to an adult child
- If a property owner gets married and wants to add their spouse to the title or share the property ownership.
- After divorce
- When siblings decide to transfer a property among each other without a formal sale
- When grandparents decide to pass a property directly to a grandchild or grandchildren
How Can You Nullify a Quitclaim Deed?
The most effective way to nullify a quitclaim deed is for both pirates in the transaction to sign an agreement canceling it. If you believe someone used a quitclaim deed to transfer property illegally, you can challenge this in court if necessary.
How Long Does It Take to Complete a Quitclaim Deed?
The time it takes to complete a quitclaim deed can vary depending on various factors, such as the jurisdiction and complexity of the transfer. In many states, a quitclaim deed will be transferred within seven to 10 business days. You can speak with the local jurisdiction or check with the relevant state authorities to understand the transfer time for your locality.
Is a Quitclaim Deed the Same as a Title Transfer?
A title transfer is a process that makes something the legal property of another person, which can happen in a variety of ways, including through a general warranty deed or a special warranty deed. A quitclaim deed can be used to transfer the title of a property faster, but for general real estate transactions, it's a higher risk. You're better off using a general warranty deed.
With a quitclaim deed, if the grantor has what is considered a “bad” title, for example, if they don't own the property, the grantee receives it as is. That's why quitclaim deeds are normally only used between family members and trusted individuals or to fix an error in the original title.
Using Quitclaim Deeds to Transfer Real Estate
A quitclaim deed makes sense to transfer property between family members or trusted friends. For general real estate transactions, a general warranty deed or standard warranty deed offers greater protection. A quitclaim deed is fast and simple to file if you choose that route. Ready to consider other real estate opportunities? Find the best online mortgage lenders, or find Benzinga’s complete guide to investing in real estate here.
Frequently Asked Questions
Do both parties need to agree on using a quitclaim deed?
If two or more parties hold ownership in the property, both must agree to sell, mortgage or will the property.
Does a quitclaim deed transfer debt or mortgage responsibility?
A quitclaim deed doesn’t transfer mortgage responsibility. A quitclaim deed transfers a property title, but the mortgage remains in the grantor‘s name.
Can I sell a property with a quitclaim deed?
Yes, you could sell a property with a quitclaim deed. It doesn’t offer the same protections or guarantees as a warranty deed so most buyers may balk at only a quitclaim deed. You can use it to transfer property between family members.
About Alison Plaut
Alison Plaut is a personal finance and investing writer with a sustainable MBA, passionate about helping people learn more about wealth building and responsible debt for financial freedom. She has more than 17 years of writing experience, focused on real estate and mortgages, business, personal finance, and investing. Her work has been published in The Motley Fool, MoneyLion, and she regularly contributes to Benzinga.