When Do You Use A Quit Claim Deed?

Quit claim deeds are a bit different than your usual warranty or special warranty deed. Unlike warranty deeds and special warranty deeds, quit claim deeds aren’t usually used in outright sales transactions. Instead, they are more often used in the event of passing property from one family member to another during times of transition.

So, What Does Quit Claim Mean?

The easiest way to explain it is in the example of a couple going through a divorce, which is a common instance where a quit claim deed is used. If a couple bought a house together during the course of their marriage, but then get divorced some time later, one spouse can ‘quit their claim,’ or give up their own half of the ownership of the house to their soon-to-be ex. 

Subsequently, the deed used to transfer that half of the ownership to the other person is a quit claim deed. Another instance in which a quit claim deed is created is any kind of transaction between close family members, such as a parent and adult child. 

Why Aren’t Quit Claims Used in Regular Property Sales?

The reason quit claim deeds aren’t used in usual sales transactions is that they don’t have the kinds of protections that the regular or special warranty deeds do. With regular or special warranty deeds, the buyers and sellers do not usually know each other the way family members do, so there is enough risk involved to require thorough research into whether a title is clear or defective.

Most families know what’s going on with each other, even if it is a married couple in the process of divorcing, and if a couple purchases a house together in their happier times, and they were honest with each other at the start, they’re going to know the ins and outs of what happened at the time they bought their home, both deed and title wise.

Stipulations of a Quit Claim Deed

One thing you’ll need to remember when creating a quit claim deed is that if there is still an existing mortgage in the name of one person or another, the person whose name is officially on the mortgage still needs to make payments on the house, even if they are signing their rights to their interest over to the other person. If the other person taking over those property rights but is not on the mortgage, they are allowed to live in the property, but are not responsible for payments.

However, they would still need to leave the home in the case of foreclosure.

Who Should Be The One To File the Deed?

The one who is choosing to sign over their rights to the property to another person should be the one to file the quit claim deed. Aside from needing to sign the deed in front of a notary public to make the quit claim deed legally binding, the person filing the deed should gather and include the following information:

  • A complete legal description of the property. This is the part of the deed that details the property’s exact measurements. If the property has changed, then the grantor (the one signing over their interest) needs to contact a surveyor to measure out the property and thus obtain a new description.
  • Full names of both grantor and grantee. All names should be double-checked for errors, and any errors corrected in order for the transition to go smoothly.
  • Special clauses need to be listed. These are usually placed after the legal description, and this is also where the reason for the quit claim, such as divorce, is listed. Only it will not likely be termed specifically as “divorce,” but more along the lines of “property or matrimonial agreement.”

For those reading this who need to file a quit claim deed, you need to know that you’ll be paying a fee to the county clerk once you’ve filed the deed. How much you’ll end up paying will ultimately depend on the property transfer amount as well as the number of pages in the deed. And even before the actual deed is filed, you’ll be filing a preliminary change of ownership report, which tells the county clerk how to determine the filing fee.

Of course, once everything is completed, signed, notarized, etc, both parties involved need to recognize that the deed is a legally binding document.