If you are a parent transferring the old family home to an adult child or someone going through a divorce, you’ll need to file a quitclaim deed prior to successfully changing ownership. Quitclaim deeds are used when the property is transferred from one legal entity to the next without exchanging money.
Quitclaim deeds release a person’s interest in the property
A quitclaim releases a person’s interest in the property, so they cannot claim it later. It can also remove apparent defects in the title without going through litigation. A quitclaim deed includes a legal description of the property, the name of the person transferring their interest (grantor), the name of the person receiving that interest (grantee), the date, and the notarized signatures of both parties. Once this is done, the user can further clarify property ownership through general or special warranty deeds.
Before utilizing a quitclaim deed, have a lawyer help you draw one up so you don’t accidentally sign your rights away.
Quitclaim deeds contain no warranties of title
Remember that a quitclaim deed contains no warranties of title, as the property wasn’t transferred via sale. This means that there are no protections for the grantee against risks that would make the property less valuable to them, such as undisclosed mortgages, liens, or unresolved claims to the property.
Quitclaim deeds don’t release you from mortgage obligations
In the event of divorce or other non-sale transfer of the property, be aware that a quitclaim deed does not release you from your mortgage obligations. It removes you from the deed, not the mortgage loan. If your ex-spouse doesn’t make payments on the home, you can still be held responsible unless there is an indemnity clause in your divorce agreement.
When buying or selling a home, work closely with your agent to ensure a clear title and smooth transfer of property.