Quitclaim Deed | What is a Quit Claim Deed?

In other words, if the current owner has title, the Quitclaim Deed will transfer title to the new owner.  But the current owner does not guarantee that the current owner actually has a clear title to the property.  If it turns out that the current owner does not have clear title, the transferee cannot sue the current owner for failing to convey clear title to the real estate.

This lack of liability distinguishes Quitclaim Deeds from other types of deeds, such as Warranty Deeds or Special Warranty Deeds.

• With a Warranty Deed, the transferor guarantees that he or she has clear title to the property.
• With a Special Warranty Deed (also known as a Grant Deed or Covenant Deed), the transferor guarantees that he or she has not done anything to encumber the title to the real estate, but doesn’t make any promises about what may have happened before the transferor acquired title.

With a Quitclaim Deed, the transferor makes no assurances.  The transferee simply takes whatever title the transferor has. The transferor is not liable if title is defective.

Special care must be taken to ensure that the deed is actually a Quitclaim Deed and not one of the other forms of deeds. This requires special, state-specific language to be included in the deed. This language is often very similar to the language used in other forms of deeds. Failure to include the right language can result in an inadvertent warranty of title or create future title issues that have to be resolved by a court.

Differences Between Quitclaim Deeds and Deeds Without Warranty

Quitclaim Deeds are commonly used in most states to transfer real estate. In some states, title insurance companies are wary of Quitclaim Deeds. In these states, which include Texas and North Carolina, it is best to use a Deed Without Warranty (also called a No Warranty Deed) instead of a standard Quitclaim Deed. A Deed Without Warranty does the same thing as a Quitclaim Deed, but uses different terminology. For example, a Texas Deed Without Warranty will transfer property without any warranty of title, just like a Quitclaim Deed.

Common Uses of Quitclaim Deeds

Quitclaim deeds are common where there is a preexisting relationship between the transferee and the transferor or when no money is changing hands (that is, when the transfer is without consideration).  Common transfers by Quitclaim Deed include:

• “Taking someone’s name off” of a deed or adding a person to the deed (see How to Add a New Owner to the Title Deed to Real Estate for more information);
• A transfer of heir property (or other inherited property) between family members (see How to Remove a Deceased Owner from a Title Deed to Real Estate for information about removing a deceased owner;
• A transfer of real estate from a person to a business that is owned by that person; and
• A gift of property from one person to another.

Quitclaim deeds are often used after a divorce.  Most spouses own their homes jointly, meaning that both of them are listed on the deed to the home.  In a divorce proceeding, the settlement agreement often requires one spouse to convey his or her interest in that home to the other spouse, so that only one spouse will own the home after the divorce.  A Quitclaim Deed is usually used to eliminate one spouse’s interest in the home. See How to Remove an Ex-Spouse from a Title Deed for more information.

A quitclaim deed can also be used to transfer inherited property among heirs.  Say, for example, that three children inherit property from their mother, but only one child wants the property. To transfer the inherited property to the child that wants the property, all three children could sign a quitclaim deed. All three children would sign as current owners and the child that wants to keep the property would be listed at the current owner. This would effectively transfer the property from all three children to the child that will keep the property.

Because the transferee has no assurance that he or she is getting clear title to the real estate, Quitclaim Deeds are not often used in commercial settings.  If a person is buying real estate in an arm’s length transaction, the buyer will want at least some warranty of title.  Because of this, most sales of real estate will use a Warranty Deed or Special Warranty Deed instead of Quitclaim Deed.