This blog talks about what is a Quitclaim Deed, and warranty deed vs quitclaim deed.

Introduction 

One needs to understand the terminologies used in legal terms before apprehending the context when it comes to the real-estate terms. (1) 

Let us understand 3 important terminologies in this context.

I. “A Deed” is a legal document that is used to transfer the ownership of real estate property.

II. “A Grantor” is a body or a person who transfers the interest of real-estate property which he/she owns.

III. “A Grantee” is a body or a person to whom the interest of the real-estate property is transferred.

A sale deed is a most definite term that the property has been transferred from the seller to the buyer and the seller does not have any right once the sale is complete and the deed is transferred to the new buyer’s name.

What is a Quitclaim Deed?

This deed could be defined as the transfer of ownership from the Grantor to the Grantee without compromising the Grantor’s title.

To further explain, the grantor is willing to transfer his/her interest in the said property to the grantee; however, the grantor does not promise that he has any interest in the said property. 

This means that in case it turns out that the grantor does not have any interest in the said property, the grantee cannot sue or take any legal course against the grantor.

These deeds are usually done in the following contexts:

• The Grantor still owns the property and the Grantee is completely aware of it and only the interest of the Grantor is been transferred to the Grantee to utilize the said property for instance 

o Transfers are made between family members;

o Between an individual and a trust, 

o From a business owner to the business entity.

o To add and/or remove a spouse’s name in the title

o To add and/or remove a lien from the title.

o To fix a fault in the title – like a misspelled name.

• This could also be used to get one of the spouse’s names off of the title in case of divorce between partners.

• Since there’s no guarantee of ownership, Quitclaim Deeds are mostly used between parties of trusted relationships. 

We’ve discussed what is a quitclaim deed, now it’s time to talk about Warranty Deed vs Quitclaim Deed. 

Warranty Deed vs Quitclaim Deed

A quitclaim deed could also be called a non-warranty deed, a quitclaim deed as this deed bears only the interest the grantor has in the said property. The grantor only “remises, releases, and quitclaims” their interest in the property to the grantee and there are no warranty claims/promises. (2) 

A warranty deed is usually done when a sale of real estate property happens. A warranty deed provides a guarantee to the grantee (buyer) that the grantor (seller) has legal title to the property and if there are any legal issues the grantee (buyer) could sue the grantor (seller).

Every state and/or county has different rulesets and requirements with regards to the Quitclaim Deed. However, the below describes the basic requirements. (3) 

Important points to consider:

1. This deed needs to include the Legal names and corresponding identification numbers of all parties – Grantor and Grantee. 
2. If any of the parties is a body or trust the complete name and registration number of those parties are essential. 
3. The Quitclaim Deed must include the details of the property with its legal description – These descriptions would be present in the “warranty-deed” of the Grantor when he/she has registered at the time of buying. The property description with the complete address (with the “file/folio reference number” of the property must be mentioned. The file/folio reference number would have been provided by the appraiser of the registration body of the particular county.
4. The deed must be signed by all parties – Most of the county law states that the Quitclaim Deed must be signed by all parties (Grantor, Grantee, Witnesses (minimum of two)) and the endorsement of the signature must be in the presence of the notary public, and the notary public must also endorse the Quitclaim Deed document. 
5. The Quitclaim Deed must be filed with the appropriate county Clerk of Court where the property is located – There may be a filing fee and this fee could be levied according to a number of pages of the Quitclaim Deed. 

Usually, Quitclaim Deeds are permanent in nature; and one cannot cancel the Quitclaim Deed. Once the Deed has been notarized, it can’t be annulled unless it is decided and done by the appropriate court of jurisdiction. 

Concluding thoughts 

The main disadvantage of Quitclaim Deed is on the account of the Grantee as there is a lack of any promise of ownership on the part of the Grantor. 

The Grantee who takes property using a Quitclaim Deed cannot sue the Grantor in case of any events that may prove; for example, the Grantor has no title or limited title to the said property. (4) 

It therefore could be defined that this type of deed offers no protection for recipients (Grantees). Furthermore, a Quitclaim Deed does not affect the names on a mortgage and it does not abolish one’s mortgage responsibilities.

For instance, if a person has sole ownership of the property and the property has been mortgaged, adding his/her spouse to the title using Quitclaim Deed will not affect the mortgage rulesets and the added person will not be held responsible for the mortgage.  

However, if the added person/spouse is going to share the loan, then one needs to refinance the mortgage in both the parties’ names.

Similarly, in the case of a mortgage, if one of the spouses removes his/her name using Quitclaim Deed wherein the property had been shared under the mortgage scheme, the mortgage lender will still make both the spouses to hold responsible for any missed payments even the spouses are been divorced or in the process. 

During divorce proceedings and the division of property, the appropriate court of jurisdiction would decide the mortgage payment responsibility. 

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