5 Important Facts About Quit Claim Deeds

Real property titles, today, are transferred through deeds. Property deeds are written legal documents signed by concerned parties to formally transfer ownership from the grantor (previous owner) to the grantee (new proprietor).

There are numerous ways to classify deeds. But generally, they are sorted as private or official. When you say official deeds, they are implemented according to legal proceedings. Court proceedings may include tax deeds and trustees’ deeds. However, most real estate transactions concern private deeds.

Quit claim deeds, technically speaking, are generally used to transfer real estate between members of the family or to correct errors on land titles, like misspelled names. Here are the most important things you need to know about quit claim deeds:

  1. It doesn’t include warranties. The very first thing you should consider is that quit claim deeds come with the least protection among other deeds, hence the appellation “non-warranty deed”. It conveys the grantor’s current interest in the real property.

Grantees of quit claim deeds merely get no assurance after acquiring the ownership of the property. If the previous owner doesn’t have proper title, then the new owner will receive nothing.

  1. Deal with trustworthy grantors only. When it comes to accepting quit claim deeds, make sure that you’re transacting with people you personally know. This is important because they offer no warranties regarding the title quality. Low-risk transactions are usually used when the grantor and grantee trust each other.

Therefore, quit claim deeds are normally used in transferring properties within families, siblings, or married couples. It’s also applicable in transferring property to a business subsidiary.

  1. Correct title defects and other related errors. Title defects are commonly referred to as clouds in the history records of real property titles. It includes missing signatures, wording issues, and misspelled names of the grantee. It’s important to correct errors, especially when the warranty deed is put on public records.
  2. Quit claim deeds with good title are effective just like warranty deeds. If the previous owner’s title is good before delivering the deed, then it will be as effective as warranty deeds. In fact, they are commonly used in transferring title to parent companies and subsidiaries.
  3. It doesn’t affect mortgages. Quit claim deeds only affect the name and ownership of the deed, and not the security interest. They are usually used by family members in transferring properties, and not to sell. The one who owe the mortgage is responsible in repaying the mortgage, not the new owner.

Although quitclaim deeds are easy-to-use forms that transfer real property interests from a grantor to a grantee, it doesn’t make any guarantees about what that interest might be. Quitclaim deeds simply are not appropriate for real estate transfers between strangers as it may eventually cause problems with regards to ownership. Therefore, in using this type of deed, it’s imperative that you trust the person you are receiving it from. A quitclaim works perfectly for family transactions rather than business type transactions. Like when you or someone else from your family is gifting a house or when you are going through a divorce and have been awarded the house, your ex-spouse can have his name removed on the property you both own through a quitclaim deed.

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