The Home Category The Home: family money matters

How does a quit claim deed work?

To many people, a deed is a deed is a deed. There are a variety of types of deeds.

The most common are the warranty deed and the deed of trust. These are the most reliable and enforceable deeds used, because they provide guarantees of authenticity to buyers and owners.

Other commonly used deeds include quit claim, foreclosure and tax deeds. A property owner in financial difficulty can also offer a lender a deed-in-lieu-of-foreclosure to avert legally losing the property because of mortgage default.

What Quit Claim Deeds Don't Offer

Quit claim deeds are the least desirable of the commonly used types, because they offer no warranties or covenants to the buyer or grantee (entity taking ownership).

There are no guarantees that the granter (person transferring ownership) has the right to even make a transfer of ownership. For example, John Smith (granter) transfers ownership of Fenway Park (owned by the Boston Red Sox major league baseball team) to Robert Jones (grantee). In this case, the buyer, or grantee, ends up owning nothing, since the seller/granter, John Smith, had no ownership to transfer in the first place. Still, Smith had a right to offer a quit claim deed to Jones, since Smith offered no guarantees of ownership. A quit claim deed provides no guarantee of ownership for either granter or grantee.

What a Quit Claim Deed Does Offer

Unlike warranty deeds, quit claim deeds offer little to the buyer of the property in question or the grantee if there is no "arms length" purchase and sale.

The only guarantee offered by a quit claim deed is that the seller/granter is freely and willingly transferring any and all rights they have in the real estate being transferred.

Should they have limited or no ownership in the subject real estate, the buyer/grantee effectively receives nothing. The use of a quit claim deed is a legal transaction, however, because this document does not guarantee any ownership rights on behalf of the seller/granter.

When Might Quit Claim Deeds Be Used

While quit claim deeds provide little comfort for the buyer or grantee, they are useful in some situations. For example, one party owns real estate, and wants to add one or more other people (siblings, children, parents, partners). There may be no need to engage in a full real-estate closing and title search.

The current owner could simply file a quit claim deed that transfers ownership from herself to herself and the additional party(s). Another common and convenient use occurs during a divorce. One spouse can file a quit claim to transfer ownership in the property to the other spouse without incurring charges for a more complicated warranty deed creation.