If it sounds like an odd agreement between two parties, that’s because it often is: the quitclaim (or sometimes the “quick-claim deed”) is a very unique agreement that could have your head spinning by the time you finish reading this article. But once you get a basic handle on it, you’ll understand its uses and, of course, why it can often be a powerful tool in certain cases.
Might a quitclaim deed be exactly what you’ve been looking for? Keep reading about the ins and outs of quitclaim deeds and you’ll be sure to find out.
What is a Quitclaim Deed?
This is, of course, the question that gets to the heart of things: what the heck does the thing even do? Typically, a quitclaim deed is used to transfer property like real estate between one party and another – with the caveat being that the grantor of the property in question does not guarantee that the property is actually theirs. This means that there is no warranty in place as might be the case in traditional real estate transactions and other purchases.
The types of deeds used in real estate transactions will include warranties and guarantees that the property in question is fully owned and transferrable by the owner you’re buying the real estate from. The quitclaim deed does not have this feature, and instead the focus is one quick transactions and transferals. This naturally leads to another question…
Who Uses Quitclaim Deeds?
Typically, two parties (such as in a real estate transaction) will use different agreements in which there is a warranty and guarantee that the previous owner of the property is actually capable of selling the thing; without this clause, the purchaser is taking a lot of risk. Quitclaim deeds, by contrast, will be used within families and businesses in order to quickly and efficiently change the owner of a piece of property. For instance, someone with a business might sign over a piece of property to that business with a quitclaim deed. Since a high degree of trust is necessary for a quitclaim deeds, they’re often kept within families or without two parties at all.
Other Uses for Quitclaim Deeds
Of course, each state is different, and there are often different uses for quitclaim deeds across the country. In some states, quitclaim deeds can be used in tax deed sales, because the local authorities will have no official claims to the title of the property but do still need to receive some money on it in order to cover any tax debts.
When Should You Use a Quitclaim Deed?
The answer is pretty simple: whenever it’s appropriate. It’s not appropriate in a majority of real estate transactions, and if you don’t trust anyone that you’re dealing with, then a quitclaim deed will be out of the question. But if you want to transfer a large gift to someone in your family and have no interest in keeping the property itself, and the family member trusts you, a quitclaim deed can be a quick and effective way of transferring the property legally and on paper.