What is a "quit claim deed"?

gismo

gismo

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For the lawyers out there (or anyone else who knows real estate law), I'm trying to learn what the circumstances are when real property ownership can be transferred with a quit claim deed and what the ramifications of such a transfer are.
 
I'm not a lawyer, and I didn't even sleep at a Holiday Inn last night, but I did have to look up this same thing a couple months back.

http://en.wikipedia.org/wiki/Quitclaim_deed

Basically, if you give a "Quit Claim Deed" on your property, you're "quitting any claim" of interest you have in the property--it goes from you (the grantor) to the new party (grantee) with no claim (lien or otherwise) by you against the property.

At least that's how I understood it after reading the article referenced above.
 
Can't speak for your state Lance but generally its a pretty crappy deed. I always insist on at least a deed of special warranty for my clients. Basically your saying " I'm giving you what ever interest I have" Problem is you could have belmishes on your interest.
 
AdamZ said:
Can't speak for your state Lance but generally its a pretty crappy deed. I always insist on at least a deed of special warranty for my clients. Basically your saying " I'm giving you what ever interest I have" Problem is you could have belmishes on your interest.
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What he said.

Stay the heck away from quitclaim deeds. They're not even the equivalent of an "as is" car sale - at least with the car sale, you can get $100 bucks for the car at the junkyard.
 
I've only seen them used in a mortgage refinance. For example, if a woman is refinancing her home left to her in a divorce, if not all "I's" dotted and "T's" crossed are done during the divorce, something may show up during the title search that indicating the ex-husband still has a claim. So, the new finance company will want him to sign a Quit Claim Deed releasing him from any claim on the property and putting the new mortgage company potentially at risk.

When I was doing courier work for a mortgage company, I had to chase around a few states to get a signature then notarize the QCD.
 
Only time I've ever seen quitclaim deeds used effectively is when one or more people held joint title to something (like inherited property or marital property), as a way to relinquish their ownership interest to another owner. As noted, it is NOT an effective way to transfer ownership to a third party.
 
Obi Heed Kenobi said:
What he said.

Stay the heck away from quitclaim deeds. They're not even the equivalent of an "as is" car sale - at least with the car sale, you can get $100 bucks for the car at the junkyard.
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Ditto all the above, mostly. A QCD is a valid tool in the real estate attorney's toolbox and it can be important in the effort to work towards clear title, but it does not give you clear title by itself. Its use is limited and you have to be sure of why it is being used. If all you get is a QCD you are stepping into the grantors shoes and anyone else who may have an interest in the property will be very glad to meet you and your balance sheet.

Nothing trumps a careful title search, followed by a Special Warranty Deed with covenants against grantor's acts, followed by Title Insurance.

-Skip
 
Lance - you don't say if you are buying or selling using the QCD. Mortgage companies will often request a QCD rather than go through the expense and time of a Foreclosure. The advantage to the occupant is that the lender then gives up a deficiency claim against the owner.

Are you in the R/E business in Minneapolis?
 
Lance:
In addition to the comments of the learned folks above:

Different states conduct the conveyance of RE differently. Some have title insurance; others look at a chain of title. Here in Texas (a title insurance state) one gives the title company what they need to issue a title insurance policy. If claims arise in the future, the insurer deals with claims covered by the policy. It handles most issues that would normally arise. So, the title insurer gets real picky about encumberments and tries to eliminate any risk to them. We always try to get a general warranty deed, but can't always get that because there are prior claims against the property such as easements to utilities and granting of mineral rights. Most of the time, we get a special warranty deed which has enumerated exceptions.

We have used a quit claim several times where the granting of title policy insurance probably doesn't matter: for instance, we recently gifted 30 acres of land to a city that is located in flood plain. They were happy with the gift and we didn't want any future claims against us as the grantor. We also gifted an out parcel to someone with only a quit claim; essentially, they get what we have with no reps. or warranties on our part. If they want title insurance and a better deed, they can work that out themselves at their expense.

Best,

Dave
 
I think what got Lance going was the story on NBC's Law & Order last night which involved a con artist working on people with debt problems related to subprime loans. The conman represented himself as a debt relief service, and told them they had to sign a quitclaim deed giving their house to him by telling them this would help clear their credit -- total baloney. He would then flip the house at a "steal" of a price to another buyer and get the new buyer to pay part of the price in cash (like $50K in dollar bills), the incentive being to show the price of the house $50K lower for transfer tax purposes. The conman would pocket the cash and disappear, leaving the person who signed the quitclaim out of a house and the buyer with a dubious title.

One should note that since you can't cheat an honest person, this deal wouldn't work on a homeowner who did his/her homework or a buyer who wasn't looking to cheat the taxman on a house that was priced too low to start with.
 
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Actually this is about some real property that was owned by my parents at one time and I'm not worried about their clear title. There are two separate properties in two different states. One was transferred into a QPRT (Qualified Personal Residence Trust) via a QCD and the other is currently held by a limited partnership (also transferred there via a QCD). The trust and the partnership (all parts of some estate planning vehicles) are equally owned by my sister and me. She want's to divest the properties and my wife and I have plans to retain ownership. The QPRT doesn't allow anything other than an equal disbursement of the asset (the property), IOW I can't buy out my sister's interest in the trust, we have to distribute the trust asset 50/50 to ourselves and
then I can buy out her interest. I'm hoping I can do that by giving her half of what we agree it's worth in return for a QCD from her (we are on good terms). The other property owned by the limited partnership could be transferred by buying her interest in the partnership but we both feel that it would be better to terminate the partnership so it seems like a QCD from her on that property would make sense as well. IIRC, both properties are "titled" via a warranty deed FWIW.
 
TangoWhiskey said:
I'm not a lawyer, and I didn't even sleep at a Holiday Inn last night, but I did have to look up this same thing a couple months back.

http://en.wikipedia.org/wiki/Quitclaim_deed

Basically, if you give a "Quit Claim Deed" on your property, you're "quitting any claim" of interest you have in the property--it goes from you (the grantor) to the new party (grantee) with no claim (lien or otherwise) by you against the property.

At least that's how I understood it after reading the article referenced above.
Click to expand...


When I got divorced a few years back we decided that my ex would
keep the house because I didn't want the high payment. I executed
a Quit Claim Deed and she refinanced getting my name off the loan.
It worked fine.
 
lancefisher said:
Actually this is about some real property that was owned by my parents at one time and I'm not worried about their clear title. There are two separate properties in two different states. One was transferred into a QPRT (Qualified Personal Residence Trust) via a QCD and the other is currently held by a limited partnership (also transferred there via a QCD). The trust and the partnership (all parts of some estate planning vehicles) are equally owned by my sister and me. She want's to divest the properties and my wife and I have plans to retain ownership. The QPRT doesn't allow anything other than an equal disbursement of the asset (the property), IOW I can't buy out my sister's interest in the trust, we have to distribute the trust asset 50/50 to ourselves and
then I can buy out her interest. I'm hoping I can do that by giving her half of what we agree it's worth in return for a QCD from her (we are on good terms). The other property owned by the limited partnership could be transferred by buying her interest in the partnership but we both feel that it would be better to terminate the partnership so it seems like a QCD from her on that property would make sense as well. IIRC, both properties are "titled" via a warranty deed FWIW.
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Sounds like you need a lawyer who knows Minnesota law.
 
Ron Levy said:
Sounds like you need a lawyer who knows Minnesota law.
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Actually Michigan law and I've engaged one, but haven't heard from him lately and anyway he charges more than you guys. At least now I have some idea what a QCD really is.

-lance
 
lancefisher said:
Actually Michigan law and I've engaged one, but haven't heard from him lately and anyway he charges more than you guys.
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His answers are a lot more legally reliable than ours, too.

"You get what you pay for." - John Arbuckle, 1905
 
Ron Levy said:
His answers are a lot more legally reliable than ours, too.

"You get what you pay for." - John Arbuckle, 1905
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As my lawyer buddy said, "Free legal advice. Worth exactly what you're paying for it."
 
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