A quitclaim deed is a legal instrument in which the owner of a property (grantor) transfers interest to another person (grantee). In the deed, the grantor gives up all rights to claim the property and transfers this right to the grantee.
It is simply a form of a conveyance or a deed which says one person conveys whatever interest he or she might have on a property to another party, whether it be no interest or it is good title to the property.
A quitclaim deed typically includes the name of the grantor, the name of the grantee, a description of the property, the date, and notarized signatures of both parties’.
Quitclaim deeds are used by lawyers to prevent foreclosures.
In contrast to other deeds, it does not have a title covenant and the grantee has no warranty as to the status of the property. The grantee is only entitled to the interest that the grantor has on the property at the time of the transfer.
What this essentially means is that the grantor cannot guarantee that he or she will own or have any interest in the property when the transfer occurs. Therefore, it is possible that the grantee may not actually receive anything.
In addition, if the grantor acquires the property after the time of the transfer then the grantee has no right to take possession.
The lack of warranty associated with a quitclaim deed is frequently used to transfer property between family members – it is very rarely used to transfer property from a seller to a buyer.
According to merriam-webster.com, a quitclaim deed is:
“A legal instrument used to release one person’s right, title, or interest to another without providing a guarantee or warranty of title.”
A foreclosure defense strategy
Since the financial crisis of 2008, attorneys have used quitclaim deeds in foreclosure defense by transferring properties to somebody who is in bankruptcy. In theory that bankruptcy would protect that property, even though the bankrupt filer was not part of that mortgage.
There are two other main types of written documents that can be used to legally transfer property: general warranty deeds and specialty warranty deeds. Unlike a quitclaim deed, these deeds do make warranties about the property’s title and are usually used in property sales.
Video – What is a quitclaim deed?