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Quit Claim Deed
A legal instrument (legal document) which is used to transfer (convey) rights in real property from one entity (the grantor) to another (the grantee) however only the interest that the grantor currently holds in the property. Commonly used in transfers of title or interests in title, quitclaims are often made to family members, divorcing spouses, or in other transactions between people well-known to each other.
Common Uses Of A Quit Claim Deed
Real Estate Transfers Between Family Members. Quit Claim Deeds are often used to transfer property to and from family members. Transfers between parents and children, between siblings, and between other closely related family members are easily done with this type of deed.
Adding Or Removing A Spouse From Title. Whether resulting from a divorce or a marriage, a real estate owner can use a quit claim deed to add a spouse to or remove a spouse from the title of the property.
Transferring Real Estate To An LLC Or Corporation. With holding of real estate in the protection of LLC's and Corporations becoming more common, so are quit claim deeds. Corporate transfers are usually done with this type of deed as it is generally a transfer between closely related entities.
Transferring Real Estate To A Trust. As with corporate transfers of real estate, transfers to a Trust are equally common. Family planning that deals with property meant to carry on through generations often involves an initial transfer from a family member into a trust via a quit claim deed.
Removing A Cloud On Title For Title Insurance. In the process of insuring title to real estate title companies may find a "cloud" in the title. Generally this means that there appears to be someone may or may not have an interest in a property that has not been accounted for and it is causing a break in the chain of title. It is common for the company insuring the title to require the person in question to quit claim their interest in the property prior to issuing the title insurance.
Elements Of A Quit Claim Deed
While each County has specific formatting requirements for the recording of documents such as quit claim deeds there are main elements that are common to all real estate deeds.
Title. The title of a legal document tells the world what type of document it is. In this case the title is "Quit Claim Deed"
Executed Date. This is the date that the legal document was completed, signed, and executed.
Grantor. This is the person or persons that is transferring their rights to the real estate to someone else. For the purpose of a quit claim deed the term "person" can refer to a natural person, an LLC, a Partnership, a Corporation, a Trust or Trustee, or any other entity that can legally own real estate.
Grantee. This is the person that is receiving the rights to the real estate that are being transferred. Again here, the term "person" refers to any entity that can legally own real estate.
Habendum. This is the meat of the deed, the legal speak which actually transfers the rights to the property. Generally it is a phrase similar to: "...does hereby remise, release and quitclaim unto the said Grantee forever, all the right, title, interest and claim which the said Grantor has in and to the following described parcel of land, and improvements and appurtenances thereto..."
Consideration. This is what the Grantee gives to the Grantor in return for the rights to the property. While in some cases a deed may be enforceable without consideration it certainly muddies the water. It's a good idea to check with a tax accountant before transferring real estate with a "no consideration" or "gift" deed as there may be tax issues.
Legal Description. Here is where the description of the property being transferred is listed. The format of the legal description varies from state to state. The types of legal descriptions are: metes and bounds, rectangular survey, and lot and block. The "lot and block" legal description is the most common however it depends on your state. A typical lot and block description looks like: "QCD SUBDIVISION, 2ND AMD, LOT 112 BLOCK 3".
Signatures. Most states require only the Grantor to sign the deed and for it to be delivered to the Grantee for it to be valid. Grantor's signatures usually must be notarized and in some rare cases separate witnesses must also witness the Grantor signing.
Recording A Quit Claim Deed
In most states your quit claim deed is considered complete once it has been signed by the grantor AND delivered and accepted by the grantee. Recording the deed is not required by law in most states in order for the transfer from the seller to the buyer to take place. However, in order for you to be covered to protect yourself from future claims on the title, you should record the deed with your local recorder or register of deeds. This should be done as soon after the delivery and acceptance of the grantee as possible. Once a quit claim deed is recorded it becomes part of the property's "chain of title" and solidifies the point in time in which the grantee received an interest in the property.