Its a document that signes the deed to the property over to another party. IF you signed a quit claim deed to me, I would own your house. Its just basically a quick closing
[addsig]
Michael:
Be aware there are several kinds of deeds.
Quit Claim is as Birddog said: it's a deed that transfers property from one party to the next.
BUT...this kind of deed makes no warranty that the title on the property is clear. In fact, the quit claimer may not soley hold title. An example of the use of a QC deed is when you're buying a house from a divorced couple, and the deed has both their names on it. You would get a QC deed from wife, signing over her interest to the husband (or vice versa). That would leave the husband (or wife) as the sole holder of title and you can buy from him (her) without worrying about the wife (husband) coming back later and saying she (he) never got her due (man, keeping this post politically correct is tough...
Here's a definition of a Quit Claim Deed:
"A deed that does not imply that the grantor(seller) holds title, but that surrenders and gives to the grantee (buyer) any possible interest or rights that the grantor may have in the property."
A Warranty Deed does the same thing as far as transferring property from one party to another, but is given when the title is known to be good.
Here's a definition of a Warranty Deed:
"Deed that conveys title and carries warranties that the title is good, the transfer is proper, and there are no liens and encumbrances other than the ones noted."
Got these from a Google Search: define:Quit Claim DEED; define:Warranty DEED
Quiteclaim Deed: "A deed that does not imply that the grantor(seller) holds title, but that surrenders and gives to the grantee (buyer) any possible interest or rights that the grantor may have in the property."
So, I could sign a quitclaim deed over to you giving you all the ownership rights that I have in *your* house. Now, do I have any ownership rights? Probably not.. but in case I do, you've got them now.
What all this means is: a quitclaim deed is the weakest form of deed. The person giving you the deed isn't saying that they even have title or ownership rights. All they are saying is that whatever right they may or may not have had, you've got 'em now.
Want a bullet point: here it is--
Make sure the title is spotless and perfect if you're using a quitclaim deed.
I can give you a quit claim deed to the Washington Monument even though I have absolutely no ownership interest in that property. Anybody can give you a quit claim deed. It doesn't mean that they actually own the property, and if they do own the property and the property has liens on it, you'd be stuck with those. So, as Ray said, be very careful and make sure about the "quality" of title before you accept a quit claim deed from anyone.
While all of the above is true there are still a vast set of circumstances where a quit claim is perfectly appropriate. A couple of examples.
A man owns a piece of property before he is single and later marries. It is possible that the wife acquires some interest in the property by virtue of the marriage. You are buying the property and wish to cover the contingency that she has an interest. She's willing to convey whatever interest she has but is unwilling to guarantee that the property is hers, that it is free of leins, etc. This is a perfect situation for a quit claim deed.
Smith is in title to a property but is in great financial distress. Facing foreclosure he just wants to get away. You have pulled title and are sure that none of Smith's debtors have currently placed any leins against the property. Smith, in his current situation is unwilling to commit to anything which he feels might open him up to future liability. He signs a Quit Claim. You rush to the court house and record. Your next stop is across the street at the title company where you purchase a title insurance policy on your new acquisition. You got full title as surely as if Smith had signed a warranty deed.
As a general rule it is the title insurance which protects your interest in the property not the quality of the dead. Even assuming Smith had defrauded you he is broke, his guarantee that he has good title is worthless anyway. The title insurance company, on the other hand, has assets and their guarantee means something.
The examples you gave as scenarios where "a quit claim is perfectly appropriate" trouble me.
1. Man owns property and later marries; wife quitclaims whatever interest.
In PA, my experience is that before insuring title for the buyer, the title company will most likely require deed of special warranty, not quitclaim, from husband and wife to buyer, and wife will also have to sign off on the seller's affidavit, unless a pre-nup is produced.
2. Smith facing foreclosure.
If Smith is facing foreclosure, by definition that means that there is a mortgage against the property. Yet you say in your example that there are no liens against the property. In PA, clear title means no liens and encumbrances. A mortgage, in PA, is a lien. If Smith goes to the title insurance company after recording the quitclaim deed, it would be very interesting to see not only the amount of $$$ he'll be charged for title insurance, but also the exceptions on the insurance policy--title defects that the title insurance company won't insure against.
I also disagree with your statement that "it is the title insurance which protects your interest in the property not the quality of the [deed]." That assumes that a buyer acquires good title in the first place. If the title that the buyer is getting is not good, you would be hard pressed in PA to get a title company to insure it, defects and all.
The objective is not just to acquire title, but to acquire title that will be good, marketable and insurable at regular rates. Before potential buyers run off into the sunset clutching a quitclaim deed, they would be wise to consult a real estateattorney who can advise them on the applicable law of the particular state and what, if any, their risks are now or down the road in accepting quitclaims.
1) Man owns property and later marries; wife quitclaims whatever interest.
In response I bow to your greater PA experience. The deed of special warranty is indeed an option and Limited Warranty deeds are also possibilties in other situations. These do, as I recall from my intro to real estate text run the gammut from the Warranty dead, (guaranteeing marketable title) to the quit claim (transfering only whatever interest the grantee holds, without even claiming that there is such an interest) But the question was only about quit claims and I was (perhaps a bit simplisticly ) attempting to respond to what I saw as a simplistic "never take a quit claim, get only warantee deeds"
2. Smith facing foreclosure.
If Smith is facing foreclosure, by definition that means that there is a mortgage against the property.
You are, of course absolutely right here as well, I was assuming that the buyer was willing to take subject to the existing mortgage encumberance, and possible other encumbrances as well. The point I was attempting to make is that there are occasions when a seller doesn't want to sign a document which, he believes, creates a potential future liability for him. As long as one understands the liabilities one is accepting in taking a quit claim then the document is appriopriate.
"I also disagree with your statement that "it is the title insurance which protects your interest in the property not the quality of the [deed]." That assumes that a buyer acquires good title in the first place."
Here it is a little more complicated. I have, on occasion, done what we called "title deals" in which we acquired interests in property which were not exactly good title but which might be made into marketable title, either by also acquiring other interests as well or by bringing suit to quiet those interest. In the end, we bought title insurance so that we could sell the patched together pieces as clear title. It is not for the faint of heart and requires considerable legal expertise (and expense) but, on occasion it makes for an interesting deal.
i am presently recieving a "quit claim " on a home that my {ex}wife and i were tenants in common. i am finalizing a divorce. she is signing a q/c on the home. she is giving up "all interest" in the property. i have a year to refin. to relieve her on the note if i fall behind her credit will be affected. i am not sure if i will recieve a "clear" title or if she will still be on it. kenmax
Ken, its probably clear title (except for the other liens and encumbrances) (I assume that since there is a divorce involved there are attnys to protect your interest). But, as Nancy has pointed out, you might want to check TN law for specifics. In addition a title policy in your name alone would make me sleep more comfortably at night.
i recieved a quit claim deed on a property i bought from the us marshals, i was told it simply means they are releasing all interest in the property.
In my case it turned out there was a problem with the tital about 15 years back. In about 2 weeks I hope it will be corrected. some laywer fees and some frustration has taught me to be ever so careful in getting your due diligence done.
Very interesting, care to share more about the 15 year old title problem. Had the property not traded in that time so no one noticed? Was there title insurance issued on any of those trades? How did you go about correcting the situation.?
"In my case it turned out there was a problem with the tital about 15 years back. In about 2 weeks I hope it will be corrected. some laywer fees and some frustration has taught me to be ever so careful in getting your due diligence done.
As my prior post indicates, I am not saying that a person should only take warranty deeds and I am not saying that a person should never use quitclaims. What I have said is that caution should be used.
In your example #1 (wife QC's), I am saying that PA title companies will probably not insure title without "unusual exceptions" unless conveyance is by warranty deed unless there is a pre-nup produced.
In your example #2 (Smith facing foreclosure), it wasn't clear to me from your post that you were assuming the buyer was taking subject to all liens, including mortgage. (Your post said there were no liens.) And the buyer, as you agree, should understand the liabilities he/she is accepting in taking a quitclaim deed.
Again, if the buyer wants title that is good, marketable and insurable at regular rates, I believe the buyer should be cautious about accepting quitclaim deeds. As you yourself said when recounting one of your experiences with property that had title defects:
"we bought title insurance so that we could sell the patched together pieces as clear title. It is not for the faint of heart and requires considerable legal expertise (and expense) but, on occasion it makes for an interesting deal."
That's the point I was trying to make in my prior post. Before people take quitclaims, they should have their real estateattorney explain the upside and downside, and then make their decision accordingly. Quitclaims should be used sparingly and cautiously.
Its a document that signes the deed to the property over to another party. IF you signed a quit claim deed to me, I would own your house. Its just basically a quick closing
[addsig]
Michael:
Be aware there are several kinds of deeds.
Quit Claim is as Birddog said: it's a deed that transfers property from one party to the next.
BUT...this kind of deed makes no warranty that the title on the property is clear. In fact, the quit claimer may not soley hold title. An example of the use of a QC deed is when you're buying a house from a divorced couple, and the deed has both their names on it. You would get a QC deed from wife, signing over her interest to the husband (or vice versa). That would leave the husband (or wife) as the sole holder of title and you can buy from him (her) without worrying about the wife (husband) coming back later and saying she (he) never got her due (man, keeping this post politically correct is tough...
Here's a definition of a Quit Claim Deed:
"A deed that does not imply that the grantor(seller) holds title, but that surrenders and gives to the grantee (buyer) any possible interest or rights that the grantor may have in the property."
A Warranty Deed does the same thing as far as transferring property from one party to another, but is given when the title is known to be good.
Here's a definition of a Warranty Deed:
"Deed that conveys title and carries warranties that the title is good, the transfer is proper, and there are no liens and encumbrances other than the ones noted."
Got these from a Google Search: define:Quit Claim DEED; define:Warranty DEED
Andy
Arytkatz's reply is especially telling:
Quiteclaim Deed: "A deed that does not imply that the grantor(seller) holds title, but that surrenders and gives to the grantee (buyer) any possible interest or rights that the grantor may have in the property."
So, I could sign a quitclaim deed over to you giving you all the ownership rights that I have in *your* house. Now, do I have any ownership rights? Probably not.. but in case I do, you've got them now.
What all this means is: a quitclaim deed is the weakest form of deed. The person giving you the deed isn't saying that they even have title or ownership rights. All they are saying is that whatever right they may or may not have had, you've got 'em now.
Want a bullet point: here it is--
Make sure the title is spotless and perfect if you're using a quitclaim deed.
All the best,
Raymond Merz
To the above posts, I would add...
I can give you a quit claim deed to the Washington Monument even though I have absolutely no ownership interest in that property. Anybody can give you a quit claim deed. It doesn't mean that they actually own the property, and if they do own the property and the property has liens on it, you'd be stuck with those. So, as Ray said, be very careful and make sure about the "quality" of title before you accept a quit claim deed from anyone.
While all of the above is true there are still a vast set of circumstances where a quit claim is perfectly appropriate. A couple of examples.
A man owns a piece of property before he is single and later marries. It is possible that the wife acquires some interest in the property by virtue of the marriage. You are buying the property and wish to cover the contingency that she has an interest. She's willing to convey whatever interest she has but is unwilling to guarantee that the property is hers, that it is free of leins, etc. This is a perfect situation for a quit claim deed.
Smith is in title to a property but is in great financial distress. Facing foreclosure he just wants to get away. You have pulled title and are sure that none of Smith's debtors have currently placed any leins against the property. Smith, in his current situation is unwilling to commit to anything which he feels might open him up to future liability. He signs a Quit Claim. You rush to the court house and record. Your next stop is across the street at the title company where you purchase a title insurance policy on your new acquisition. You got full title as surely as if Smith had signed a warranty deed.
As a general rule it is the title insurance which protects your interest in the property not the quality of the dead. Even assuming Smith had defrauded you he is broke, his guarantee that he has good title is worthless anyway. The title insurance company, on the other hand, has assets and their guarantee means something.
commercialking,
The examples you gave as scenarios where "a quit claim is perfectly appropriate" trouble me.
1. Man owns property and later marries; wife quitclaims whatever interest.
In PA, my experience is that before insuring title for the buyer, the title company will most likely require deed of special warranty, not quitclaim, from husband and wife to buyer, and wife will also have to sign off on the seller's affidavit, unless a pre-nup is produced.
2. Smith facing foreclosure.
If Smith is facing foreclosure, by definition that means that there is a mortgage against the property. Yet you say in your example that there are no liens against the property. In PA, clear title means no liens and encumbrances. A mortgage, in PA, is a lien. If Smith goes to the title insurance company after recording the quitclaim deed, it would be very interesting to see not only the amount of $$$ he'll be charged for title insurance, but also the exceptions on the insurance policy--title defects that the title insurance company won't insure against.
I also disagree with your statement that "it is the title insurance which protects your interest in the property not the quality of the [deed]." That assumes that a buyer acquires good title in the first place. If the title that the buyer is getting is not good, you would be hard pressed in PA to get a title company to insure it, defects and all.
The objective is not just to acquire title, but to acquire title that will be good, marketable and insurable at regular rates. Before potential buyers run off into the sunset clutching a quitclaim deed, they would be wise to consult a real estate attorney who can advise them on the applicable law of the particular state and what, if any, their risks are now or down the road in accepting quitclaims.
[ Edited by NancyChadwick on Date 04/06/2004 ]
Nancy,
1) Man owns property and later marries; wife quitclaims whatever interest.
In response I bow to your greater PA experience. The deed of special warranty is indeed an option and Limited Warranty deeds are also possibilties in other situations. These do, as I recall from my intro to real estate text run the gammut from the Warranty dead, (guaranteeing marketable title) to the quit claim (transfering only whatever interest the grantee holds, without even claiming that there is such an interest) But the question was only about quit claims and I was (perhaps a bit simplisticly ) attempting to respond to what I saw as a simplistic "never take a quit claim, get only warantee deeds"
2. Smith facing foreclosure.
If Smith is facing foreclosure, by definition that means that there is a mortgage against the property.
You are, of course absolutely right here as well, I was assuming that the buyer was willing to take subject to the existing mortgage encumberance, and possible other encumbrances as well. The point I was attempting to make is that there are occasions when a seller doesn't want to sign a document which, he believes, creates a potential future liability for him. As long as one understands the liabilities one is accepting in taking a quit claim then the document is appriopriate.
"I also disagree with your statement that "it is the title insurance which protects your interest in the property not the quality of the [deed]." That assumes that a buyer acquires good title in the first place."
Here it is a little more complicated. I have, on occasion, done what we called "title deals" in which we acquired interests in property which were not exactly good title but which might be made into marketable title, either by also acquiring other interests as well or by bringing suit to quiet those interest. In the end, we bought title insurance so that we could sell the patched together pieces as clear title. It is not for the faint of heart and requires considerable legal expertise (and expense) but, on occasion it makes for an interesting deal.
i am presently recieving a "quit claim " on a home that my {ex}wife and i were tenants in common. i am finalizing a divorce. she is signing a q/c on the home. she is giving up "all interest" in the property. i have a year to refin. to relieve her on the note if i fall behind her credit will be affected. i am not sure if i will recieve a "clear" title or if she will still be on it. kenmax
Ken, its probably clear title (except for the other liens and encumbrances) (I assume that since there is a divorce involved there are attnys to protect your interest). But, as Nancy has pointed out, you might want to check TN law for specifics. In addition a title policy in your name alone would make me sleep more comfortably at night.
yes i have an attn. i aaasumed i was getting a c/t but hadn't gotten that far. thanks for the advice......kenmax
i recieved a quit claim deed on a property i bought from the us marshals, i was told it simply means they are releasing all interest in the property.
In my case it turned out there was a problem with the tital about 15 years back. In about 2 weeks I hope it will be corrected. some laywer fees and some frustration has taught me to be ever so careful in getting your due diligence done.
John
Very interesting, care to share more about the 15 year old title problem. Had the property not traded in that time so no one noticed? Was there title insurance issued on any of those trades? How did you go about correcting the situation.?
"In my case it turned out there was a problem with the tital about 15 years back. In about 2 weeks I hope it will be corrected. some laywer fees and some frustration has taught me to be ever so careful in getting your due diligence done.
commercialking,
As my prior post indicates, I am not saying that a person should only take warranty deeds and I am not saying that a person should never use quitclaims. What I have said is that caution should be used.
In your example #1 (wife QC's), I am saying that PA title companies will probably not insure title without "unusual exceptions" unless conveyance is by warranty deed unless there is a pre-nup produced.
In your example #2 (Smith facing foreclosure), it wasn't clear to me from your post that you were assuming the buyer was taking subject to all liens, including mortgage. (Your post said there were no liens.) And the buyer, as you agree, should understand the liabilities he/she is accepting in taking a quitclaim deed.
Again, if the buyer wants title that is good, marketable and insurable at regular rates, I believe the buyer should be cautious about accepting quitclaim deeds. As you yourself said when recounting one of your experiences with property that had title defects:
"we bought title insurance so that we could sell the patched together pieces as clear title. It is not for the faint of heart and requires considerable legal expertise (and expense) but, on occasion it makes for an interesting deal."
That's the point I was trying to make in my prior post. Before people take quitclaims, they should have their real estate attorney explain the upside and downside, and then make their decision accordingly. Quitclaims should be used sparingly and cautiously.