Putting together the right quitclaim deed is important because one that is not done correctly can cause major problems for you. If you’re considering this option, here’s what you need to know before moving forward.
When should you use a quitclaim deed?
A quitclaim deed can be used to help show someone’s disinterest in a property. For example, if you own an office building and get married, your spouse could sign a quitclaim deed to say they do not have any interest in that property. This quitclaim becomes public record, as well.
These documents are typically used when family members want to transfer property or when there is a problem with a title that needs to be corrected. Keep in mind that an improper quitclaim could leave you with similar issues. For example, spelling your name wrong on it could make it invalid, and invalid quitclaim deeds don’t achieve anything.
They can also be used to clear clouds on titles, such as resolving a problem with a missing signature or problems with the wording of the title.
What is the purpose of a quit claim deed?
One purpose of a quitclaim deed is to get a recorded document stating that a person no longer has an interest in a particular piece of property. Another purpose would be to add an individual not previously on the title.
When shouldn’t quitclaim deeds be used?
While these documents can be very useful in some situations, there are a few quit claim deed loopholes to consider.
Quitclaim deeds are generally not used when there is an outstanding mortgage on a property because the deed can’t affect a mortgage in any way. Usually, these deeds don’t involve money transferring hands at all.
These documents might also not be used if there are other possible solutions to a question of ownership, such as obtaining a corrective deed. In some cases, a warranty deed would better serve the parties.
They may help transfer property, but there are no title searches involved. Unfortunately, grantors may use quitclaim deeds when they are not sure of the title’s status, which means that the use of a quitclaim deed could put a buyer or new owner at risk with no recourse if something goes wrong.
Be sure you understand the legal repercussions of a quit claim deed or accepting one as a method to clear a cloud on a title or transfer property.
What happens when you have a quit claim deed but are still on the mortgage?
A quitclaim deed has no effect on a mortgage, so if you’re on the mortgage associated with the property, you will remain on it and will still be expected to make payments. You will need to make additional arrangements to transfer the mortgage to the grantee in order to ensure you’ll be protected legally and financially.
Can a quit claim deed be contested?
Yes, quitclaim deeds can be contested if there are concerns over their validity. If you’re facing a quitclaim deed dispute, reach out to a real estate attorney for help.