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Home Resources Real Estate What is a Quitclaim Deed?

What is a Quitclaim Deed?

Anderson Chen

Published December 8, 2020 | Written by Anderson Chen

A quitclaim deed is a legal document used to quickly transfer ownership of real estate from an owner or seller (the “grantor”) to another person or party (the “grantee”).

However, quitclaim deeds include no protections or guarantees for the buyer. This means that the buyer will only ever get what the seller actually owns, which may be nothing at all.

Because quitclaim deeds don’t include any guarantees that the seller has full ownership of the property, warranty deeds are more often used to transfer property. Knowing the differences between these and other types of deeds can protect you from risky property transactions.

Read on to learn about what a quitclaim deed is used for and the differences between a quitclaim deed and a warranty deed.

a filled quitclaim deed

What is a Quitclaim Deed Used For?

A quitclaim is typically used when a name has to be added or removed from ownership or no sale (transfer of money) is involved in the property changing hands. Here are some of the most common uses of a quitclaim deed:

1. For Transferring Real Estate Within Family

Quitclaim deeds are most often used in moving real estate between family members. With the added benefit of trust, those transferring property to and from a relative can do so easily with a quitclaim deed.

2. For Changing Ownership After a Divorce or Marriage

Married or divorced couples can add to, or remove their names from, property ownership using a quitclaim deed.

But it’s not limited to just marital status—quitclaims are useful for changing names on a title for any reason.

Be careful: a quitclaim deed works well here because spousal relationships are close, but if that’s no longer the case, it might be better to consider safer options such as a warranty deed!

3. For Correcting Title Defects

A title defect, or cloud on title, is anything that weakens the right to a property, whether it’s a lien, a mortgage, or another claim.

Defective titles are often claims in the property’s history that weren’t counted. Using quitclaim deeds to remove unwanted names (or any spelling errors) helps avoid legal risks in the future. Title insurance companies also use this method to fix any breaks in the chain of title.

4. For Moving Property into Trusts and Estates

Quitclaim deeds offer a simple way for family members to transfer names into a trust. Since there is no money or strangers involved in the exchange, it’s a common way to manage estates.

5. For Moving Property into Business Entities

Individuals looking to better protect themselves through business entities like an LLC (limited liability company) or a parent company relocating property to subsidiaries can use quitclaim deeds for a more straightforward title transfer. Giving ownership of real property to a corporation also works the same way.

Quitclaim Deed vs Warranty Deed

The main difference between a quitclaim deed and a warranty deed is a quitclaim deed does not guarantee that the grantor owns the property. A warranty deed, however, does state that the grantor has legal ownership of the property.

Quitclaim deeds also don’t protect the grantee (buyer) from any other claim or liability the property might have. As a safer alternative, warranty deeds hold the grantor accountable for any obstacles the grantee faces, such as mortgages, existing liens (a hold for unpaid debt), or other claims on the property.

By extension, a general warranty deed protects the grantee from any defect in the property’s entire history. Quitclaim deeds offer no promise of ownership, so they do not clear the property of defects for any time period.

Finally, warranty deeds are typically used when large monetary transactions are involved, whereas quitclaim deeds are used when little or no money is transferred (e.g., transfers between family members).

To recap, quitclaim and warranty deeds differ in the following important ways:

Quitclaim DeedWarranty Deed
Offers no warrantyOffers warranty that covers all defects
Title defects not clearedClears title defects
Typically used when ownership changes, but without a saleUsed to buy and sell property

Conclusion

Before using a quitclaim deed, make sure you know the possible risks and safer alternatives. In general,

  • Use a quitclaim deed if you want to transfer property to a family member or trusted friend.
  • For real estate sales involving strangers, look into warranty deeds instead.
Anderson Chen

Anderson Chen

Anderson Chen is a staff writer at LegalTemplates. His background in journalism drives him to decode legal information for regular people, from small businesses to individuals.

Related Articles

  • Should You Rent or Sell Your Home?
  • Types of Deeds: 6 Different Types of Real Estate Deeds
  • Deed vs Title: What’s the Difference?

In This Article

  • What is a Quitclaim Deed Used For?
  • Quitclaim Deed vs Warranty Deed

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