When any property transfers from one owner to another, a deed of transfer must be recorded with the local registry in the appropriate city or county. Generally, when one party purchases property from another party, a warranty deed is written, signed, witnessed and recorded. However, this may not always be necessary.
A quitclaim deed is often utilized when the circumstances don’t necessarily involve a straightforward purchase of property, yet the ownership needs to be altered. Unlike a warranty deed or a grant deed, a quitclaim deed is when the grantor (owner) makes no promises about his or her interest in the property. The grantor simply releases any interest in the property that he or she may possess without any further provisions. The quitclaim deed is most often utilized upon the finalization of a divorce, where one spouse agrees to turn over their half (or other percentage) of the property to the other spouse. Most often, this involves a transfer of funds where one party “purchases” the other party’s interest, but this is not necessarily required. The provisions of the quitclaim deed are either determined by the court as part of the divorce stipulations, or agreed upon by the parties themselves. A quitclaim may also be used when, for instance, several children are left property upon the death of their parent(s), and one or more children may wish to sign over their interest(s) to another child or children. Again, this may involve a transfer of funds, but depending on the agreement between the children, that isn’t always true. A quitclaim deed is usually the best format for changing ownership within families rather that a warranty or grant deed. Additionally, many states allow the transfer of property through quitclaim provisions without the parties having to pay transfer taxes, so that is another excellent reason this type of transfer should be explored if possible.