A New Jersey quitclaim deed transfers a property owner’s rights to a grantee. It’s commonly used for family transfers or divorce proceedings. Unlike a warranty deed, it doesn’t guarantee a clear title. Beware of misspellings like “quit claim” or “quick claim” deeds.
How to File
The New Jersey quitclaim deed process includes preparing the document, notarizing it, and recording it with the county. Handling each step properly secures the transfer of property.
Step 1 – Gather Your Documentation
Before putting together a quitclaim deed, you will need to reference the existing title to the property. The title should contain the legal description of the property as well as information about the current owner.
Step 2 – Fill Out the Quitclaim Deed and Relevant Paperwork
Fill out all information required for the quitclaim deed. In addition, you should fill out the other paperwork necessary for your real estate property transfer, including, if needed, Form RTF-1 for tax exemptions, RTF-1EE for real estate transfers in which the consideration is over $1,000,000, and Form GIT/REP-1 for non-resident sellers. Do not sign any forms that require notarization until you are in the presence of a notary, as they will need to witness you signing and dating those forms to validate them.
Step 3 – Take the Forms to a Notary
Find a notary and have them witness the grantor’s signature on the documents. The notary will stamp and sign the documents, confirming their validity. The grantor will need to show their ID to the notary to confirm their identity.
Step 4 – File the Forms with the County Clerk’s Office
Visit the county clerk’s office in the county where the property is located. There, you will pay all relevant transfer fees and real estate taxes on the property. You should provide the address where the form will be sent once it has been filed and registered. The real estate transfer is not valid until it has been filed with the county clerk’s office.
Costs and Fees
Filing a quitclaim deed in New Jersey often means paying recording fees and potentially a realty transfer fee. Knowing these expenses in advance helps you better prepare for the full cost of transferring ownership.
Filing Fees
Filing fees are charged when you file paperwork with the county clerk’s office. In New Jersey, these start at $30-$40 for the first page of the document. An additional $10 fee is generally added for each further page [1,2]. Various counties may have different fees, so check with the county clerk’s office ahead of time to get a better estimate of your costs.
Taxes
There are several potential tax implications to transferring real estate.
Real Estate Transfer Tax
The real estate transfer tax in New Jersey depends on a complex schedule. It ranges between approximately $2/$500 on considerations less than or equal to $150,000 and up to $6.05/$500 for considerations in excess of $1 million. Properly calculating real estate transfer taxes will ensure a smooth transfer for all parties.
Who Pays the Transfer Tax?
The real estate transfer tax is generally paid by the grantor of the property.
Exemptions to the Transfer Tax
New Jersey allows both partial and full exemptions to the transfer tax.
Partial exemptions include:
- Seniors over age 62
- Blind individuals
- Qualifying disabled individuals
- Property categorized as low- or moderate-income housing
Deeds are not eligible for more than one partial exemption.
Full exemptions for transfer taxes, including N. J. Stat. § 18:16-5.1, are:
- Considerations of less than $100
- Sales by or to the government
- Releasing security for a debt or obligation
- Correcting an error in a previously recorded deed
- Sales for delinquent taxes
- Sales for bankruptcy purposes
- Transfers between husband and wife
- Transfers between parent and child
- Transfers as part of a divorce agreement
- Executors transferring a property as part of a last will and testament
There are also circumstances under which transfer fees may be waived for corporate transfers, including those between parent and child companies.
The United States Gift Tax
The IRS assesses a gift tax on gifted property that exceeds a certain value, including real estate. Because quitclaim deeds are often used for gifted property transfers, both grantor and grantee should take the potential gift tax into account when managing the property transfer. While there are exemptions to the gift tax assigned by the IRS annually, real estate transfers typically exceed that value. New Jersey does not assign its own gift tax.
Capital Gains Tax
The capital gains tax is assessed on the amount the value of the property increases between its purchase and its sale. Real estate can appreciate substantially in value over the time it is held. There may be exclusions to the capital gains tax for individuals who use the property as their primary residence for at least two out of five years or who are in government service and move under orders.
New Jersey Quitclaim Deed Requirements
When creating a quitclaim deed in New Jersey, you must meet specific legal and formatting guidelines. Covering all requirements in advance can save you time during filing.
Statute and Requirements
- J. Stat. § 46:5-1 to 46:5-6 covers the legal requirements of a quitclaim deed. It notes that there is specific language that should be used in a quitclaim deed: notably, “the grantor releases to the said grantee” or “the grantor does remise, release, and forever quitclaim unto the said grantee,” or “the grantor does grant and release to the said grantee.”
Signing
- J. Stat. § 46:14 requires a quitclaim deed to be signed by the grantors and notarized.
Transfer Tax
New Jersey has a complex real estate transfer fee structure that should be carefully considered when transferring property, including property transferred through a quitclaim deed.
Additional Documents
Several additional documents may need to be prepared along with the quitclaim deed form.
- Form RTF-1 for tax exemptions
- RTF-1EE for real estate transfers in which the consideration is over $1,000,000
- Form GIT/REP-1 for non-resident sellers, unless they have exemptions
Filing
A quitclaim deed should be filed at the county clerk’s office where the property is located.
Validity Requirements
A valid quitclaim deed in New Jersey will need to contain several essential elements. To distinguish it from other types of property transfers and deeds, it should not include warranties or covenants related to the title on the property, since quitclaim deeds do not have warranties. To be valid, it may need to meet several clear guidelines.
Legal Description
A New Jersey quitclaim deed must include a legal description of the property — not just the property’s address, but the description included in the title. The legal description helps designate the boundaries of the property.
Statement of Consideration
The statement of consideration includes any goods or funds exchanged for the property. Some properties exchanged using a quitclaim deed may be transferred for no monetary value, as in the case of a transfer between parents and child or adding a spouse to the property. This should be stated in the document.
Contact Information for All Parties
A valid quitclaim deed needs to contain the name and address of the grantor and the name of the grantee. The document should also include the name and address of the person who prepared the deed.
Notarization
A notarized quitclaim deed establishes the validity of the document and shows that it was witnessed by the notary. It should also contain the signature of the grantor.
Quitclaim Deeds vs. Other Property Transfer Methods in New Jersey
In New Jersey, property owners have several options for the legal transfer of property.
| Quitclaim Deed | A real estate transfer method without title warranties accelerates transactions like adding or removing a spouse post-marriage or divorce, transferring property among relatives, and some commercial dealings. It ensures quicker real estate transfers but lacks title protection for the new owner, exposing them to potential title issues without guarantees. |
| Bargain-and-Sale Deed with Covenant | This real estate transfer method, often used in New Jersey, includes a covenant promising that the current owner has not altered the property's title and is unaware of any third-party claims. It offers the new buyer protection against issues caused by the current owner's actions but does not cover problems existing before the current owner's tenure or those arising from third-party actions. |
| Special Warranty Deed | offers more protection than quitclaim or bargain-and-sale deeds by having the current owner back the title and defend the new owner against claims related to their period of ownership. Common in foreclosures and bank sales, it protects more than simpler deed types but doesn't cover the grantor for liens or encumbrances prior to their ownership, leaving the new owner with some potential risk. |
| General Warranty Deed | This standard real estate transfer method includes a full warranty, with the current owner guaranteeing a clear title except for specified exceptions. It's the norm for standard real estate sales, providing the highest level of buyer protection. However, this method might require more time than other deed transfers, owing to the necessary property discovery process. |
| Life Estate Deed | Creates dual ownership interests in a property: a life interest for the current tenant to live in and use the property for their lifetime, and a remainder interest for a beneficiary to gain possession post-death. Often utilized when a property is bought with the stipulation that the seller remains a tenant until death, it ensures the property's eventual transfer but requires the beneficiary's consent for full title transfers. Irrevocable by the current owner, it offers no protection to the beneficiary against damage by the tenant. |
| Survivorship Deed Form | Automatically transfers property ownership to a surviving co-owner upon one owner's death, ensuring seamless transition without probate. This method keeps the property within co-ownership, circumventing probate challenges but offers no protection against existing liens or encumbrances. |
Sample New Jersey Quitclaim Deed
View our free sample New Jersey quitclaim deed. You can tailor it to your needs using our document editor and download it in PDF or Word format.
Frequently Asked Questions
Can quitclaim deeds be used for transferring property between family members in New Jersey?
Yes, in New Jersey, quitclaim deeds are often used for property transfers between family members. This is due to their simplicity and the absence of warranty on the title, making them ideal for transactions where there is a high level of trust between the grantor and grantee. However, it’s crucial to note that quitclaim deeds do not protect the grantee from any existing claims or liens against the property.
How do I correct an error on a New Jersey quitclaim deed?
Correcting an error on a New Jersey Quitclaim Deed involves several steps:
- Identify the error that needs correction.
- Prepare a Corrective Quitclaim Deed that specifies the correction, referencing the original deed by its recording date and book/page number.
- Include a statement within the corrective deed clarifying that it is issued for the purpose of correction, detailing both the mistake and the correction made.
- Have the grantor sign the Corrective Deed in the presence of a notary public.
- Record the Corrective Deed at the County Clerk’s Office where the original deed was recorded, along with any required fees. It’s vital to adhere to New Jersey’s legal standards for recording deeds to ensure the correction is legally recognized.
Is consideration required for a quitclaim deed in New Jersey?
Yes, consideration, or the value exchanged for the property, must be stated in a New Jersey Quitclaim Deed. Although the consideration can be minimal, such as “$1.00 and other valuable considerations,” it must be specified to validate the transfer. This requirement helps clarify the intent behind the property transfer and ensures the deed complies with state regulations.
Do I need a lawyer to execute a quitclaim deed in New Jersey?
While it’s not legally required to have a lawyer to execute a Quitclaim Deed in New Jersey, consulting with a real estate attorney can provide valuable guidance and ensure that the deed meets all legal requirements. A lawyer can help draft the deed accurately, identify any potential issues with the property transfer, and ensure that the process is completed smoothly and in compliance with New Jersey law.
