What it means
Most property sales use a warranty deed, in which the seller promises they own the property and that nothing is hiding in its history. A quitclaim deed makes no such promise.
The giver, called the grantor, simply says "whatever interest I have, I pass to you". Because it offers no guarantee, a quitclaim deed carries more risk for the person receiving it.
If the grantor had no real ownership, or if there are debts and claims attached, the receiver has little recourse. For this reason it is rarely used for ordinary sales between unrelated parties.
It is often used in situations where the parties already trust each other or where the aim is to tidy up the record. Examples include adding a spouse to a title, moving property into a trust or company, removing a name after a divorce, or releasing a possible claim so that a title becomes clear.
In these cases the transfer is about paperwork, not about proving ownership. Finance teams meet the document in due diligence, when a company acquires property or a lender takes security.
A lender may ask the possible claimants to sign quitclaim deeds so that their interests, if any, are given up. The document is then recorded in the land records so later buyers can see the transfer.
Several practical points apply. The deed must usually be signed, witnessed or notarised, and recorded in the right office, and transfer taxes or fees may be due.
The tax and legal effects of moving property, including whether an existing mortgage allows it, should be checked with a lawyer first, because the rules differ between places. A related point is that a quitclaim deed does not by itself prove that the person receiving it now owns the property.
It only records that the giver handed over their interest, which may be nothing. Buyers and lenders therefore often combine a quitclaim deed with a title search or title insurance to be sure of the position.
In practice
Real-world examples.
Example
A couple buys a home together, and one partner wants the other added to the title. They sign a quitclaim deed so the owner passes an equal interest to both. They also inform the mortgage lender to check that the loan terms are not affected, because some loans allow the lender to demand repayment if the title changes.
Example
A developer wants to build on a site but finds that a previous owner might still have a claim. The developer asks that person to sign a quitclaim deed releasing any interest. The release is recorded, and the lender accepts the title. The developer pays a modest fee for the release and treats it as a cost of the project.
Example
A business owner moves a commercial building from his personal name into his company. A quitclaim deed records the change without any sale taking place. His accountant reviews the tax and accounting treatment before the deed is signed.
Case study
Seen in the real world.
Brightfield Developments is a fictional property firm used for illustration. It was assembling several small plots for a housing scheme and found that one plot had an unclear ownership history. A distant relative of a past owner might have had a claim, though no one could be sure.
In this illustrative story, Brightfield's lawyers contacted the relative, who agreed to sign a quitclaim deed for a small payment. The deed was recorded, and the lender accepted the title without further questions. The company's finance director noted that the deed did not prove ownership, but removed a possible challenge at low cost.
Brightfield later bought title insurance for the assembled site, and the insurer accepted the recorded deed as part of its review. The finance director noted that the combination of the release and the insurance gave the bank enough comfort to proceed. She added a quitclaim step to the checklist for future land assembly projects.
Watch out
Common mistakes.
- Believing a quitclaim deed guarantees ownership. It transfers only whatever interest the grantor has.
- Using it for a normal sale between strangers. Without warranties, the buyer takes on all the risk.
- Ignoring existing mortgages and taxes. Transferring property can trigger loan clauses or transfer charges.
Questions
People also ask.
What is the difference between a quitclaim deed and a warranty deed?
A warranty deed promises that the seller owns the property free of hidden claims, while a quitclaim deed makes no promises.
Does a quitclaim deed remove a mortgage?
No, the mortgage normally stays attached to the property unless it is repaid or released separately.
Why use a quitclaim deed?
It is a quick, low-cost way to move or release an interest, especially between people who trust each other or to clear up the record.
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