A quitclaim deed is a legal document that is used in order to transfer interest in property. The entity that is transferring their interest is known as the grantor and when a quitclaim deed is completed and executed properly, it transfer any interest that the grantor has to a recipient, known as the grantee. The owner or grantor quits any right or claim to a property with this legal document. This allows the claim to transfer to the grantee or the recipient.
No Title Guarantee
Unlike other types of property deeds, a quitclaim deed has no title covenant, which offers the grantee no warranty in terms of the status of a property title. The grantee is entitled only to whatever interest the grantor possesses at the time that the transfer occurs. This means that the grantor themselves doesn’t guarantee that they actually owns any interest in the property in question during the time of transfer. They also don’t disclose if they own an interest or that the title is free and clear. It is possible that a grantee will receive no actual interest and a quitclaim deed itself offers no particular warranty. This means a quitclaim deed allows no legal recourse to occur if any losses occur as a result of a quitclaim deed.
If the grantor acquires the property at a later time, the grantee is not entitled to have possessions because the grantee can only receive interest the grantor had at the time of the transfer, not for any future acquisitions. Other deeds used during real estate sales such as warranty or grand deeds are different then this arrangement and contain warranties from the grantor to the grantee that a title is clear, not like a quitclaim deed.
Ultimately because of a lack of warranty, quitclaim deeds are generally used in order to transfer property between family members as a gift. They are also used to place personal property into a business entity or in other special circumstances. Quitclaim deeds rarely are used in order to transfer property from a seller to a buyer. In most cases, the grantor and grantee already have a relationship or is the same person. They are also used in divorce when one spouse terminates an interest in a jointly-owned home, which grants the recipient spouse full rights to the property.
In some states, quitclaim deeds can also be used during tax deed sales when a property is sold during a public auction in order to recover outstanding tax debt from a homeowner. The auctioning body, generally a local government, has no interest to the property, but is selling it to recover the unpaid taxes without a warranty to the property title itself. The recipient then just needs to initiate a quiet title auction in order to remove anything on the title.