A quitclaim or “quit claim” deed is a legal instrument that can be used to convey interest held in real property by one party onto another. Since this instrument has been used in one form or another in common law jurisdictions for centuries, all states will accept this document as a valid manner to transfer interest as long as clear ownership without encumbrances can be established.
Quitclaim deeds are dynamic instruments that can be used in various situations. The basic action is that a grantor will give up actual or prospective interest; whether that interest is transferred onto a grantee is up to the parties involved. Let’s say a married couple applies for a mortgage to purchase a house; if the wife intends to be the sole borrower in the mortgage, the lender may require the husband to quitclaim interest that he will never have in the property.
The most common use of a quitclaim deed is to add or remove spouses from title; this can happen when couples get married or divorced. In other cases, a title insurance agent may ask a heir to quitclaim if she does not want to hold interest in a home bequeathed to her.
The process of preparing, executing and recording a quitclaim deed is determined at the state level. The best course of action will always to be retain an attorney or title agent for this purpose. Most quitclaim deeds will require the following elements to be considered valid:
* Grantor and grantee.
* A statement of intention to release interest and convey it to the grantee; this is known as the habendum.
* Consideration: similar to a contract, the consideration or lack thereof must be stated, and there may tax issues at stake if there is no monetary consideration even when a property is transferred between relatives as a gift.
* Legal description as it appears on public records.
* Executed signatures: in most states, both parties must sign before a notary, and witnesses may be required by some jurisdictions.
* Preparation: even if the document is not prepared by a legal professional, whoever produced the quitclaim deed must be identified.
As with virtually all property ownership instruments in the current real estate market, a quitclaim deed does not represent a surety of title. Establishing financial interest in real property these days will invariably require a title insurance policy; this is what is known as clear and marketable title, meaning that an insurance company has evaluated the chain of title and has determined that it will protect the interests of the insured in case any claims of ownership arise.
Needless to say, a quitclaim deed that is found to have been executed in bad faith or under duress will never be considered a valid document. A few court divisions offer a fill-in-the-blanks quitclaim deed that meets statutory requirements, particularly notices about potential assessments of property transfer taxes upon the grantor.