What is a quitclaim deed?
By Barbara Craig, Real Estate Attorney
When transferring ownership of real estate (also called real property in a legal setting) from one party to another, a written document — a real estate deed — is necessary. Quitclaim deeds arose during times when real estate transactions needed to be as fast and efficient as possible. The California Gold Rush is the best example of an era in which the quitclaim deed was essential in transferring property rights quickly and with a minimum of documentation.
The sole function of a quitclaim deed is to convey the owner’s (or co-owner’s) interest in the property to another party – or in plain language, to transfer ownership of the property from one person to another.
Types of real estate deeds
There are three types of real estate deeds that are used to convey (transfer) property: general warranty deeds, special warranty deeds, and quitclaim deeds. General and special warranty deeds contain specific language — covenants and warranties — protecting the new owner from any lawful claims, and agreeing to compensation for any loss resulting from a successful third-party challenge of a title.
In contrast, a quitclaim deed is not as comprehensive and contains no covenants or warranties to protect the new owner.
What does a quitclaim deed do?
The party transferring its interest in the property is called the grantor, and the party to whom the property is transferred is called the grantee. When the grantor signs the deed, he or she terminates — or quits — any rights and claims to the property, and provides the right of transfer to the grantee.
It is important to understand that the termination of rights and transfer is not conditional. The California quitclaim deed form – which is freely available from the web sites of most county recorders – contains the following language:
FOR A FULL VALUABLE CONSIDERATION, receipt of which is hereby acknowledged
This means in signing the deed, the grantor states they have already received consideration for the transfer of the property, whatever that consideration might be. In other words, the transfer cannot be undone because the new owner didn’t follow through on a promise to pay the original owner, because the original owner has already acknowledged that they have received whatever payment was promised.
Quitclaim deed requirements
To be legally binding, a quitclaim deed must:
- Contain the names of the grantor and grantee;
- Identify the property with its legal description and county;
- Be signed by the grantor in the presence of a notary public; AND
- Be filed with the county clerk or recorder.
A quitclaim deed is a public record
Like any other real estate transfer, a quitclaim deed is a public record that is available for anyone to see. When title companies and lawyers conduct title searches before the sale of property — or in the case of legal actions like bankruptcies and lawsuits — they look for various records, including deeds. Once filed, the deed becomes part of the title record or “title chain” that lists a specific property’s owners in chronological order.
How are quitclaim deeds used today?
Because of the lack of warranty, quitclaims are mostly used to transfer property as gifts, moving property into/out of a business entity, or between family members. Among the most common uses are:
- When one spouse terminates any interest in the joint marital home after a divorce, giving the other spouse full property rights both quickly and inexpensively.
- To add a new spouse to a title after marriage.
- For parents to deed a house to their children.
- To transfer property into a trust.
In addition to these common uses, these deeds are also used:
- During regular real estate transactions as a quick fix to remove “clouds” on titles—essentially removing residual interests in a property that must be quit before being transferred to new owners.
- In tax deed sales in which a property is sold at a public auction to recover the original property owner’s outstanding tax debt.
- To remove title defects without the time and expense of litigation. Once the property’s title is established through a qc deed, a general or special warranty deed can be added to further clarify property purchase and ownership issues.
Reversing a quitclaim deed
Once a quitclaim deed has been signed and recorded, it cannot be undone as the previous property owner has already transferred the property to the new owner. The new owner would have to voluntarily give back the property to the original owner. However, if the original owner can successfully prove the deed was signed through coercion or under duress, a court can reverse it.
When a quitclaim deed shouldn’t be used
Even though quitclaims are efficient in transferring real estate ownership between parties, they have significant shortcomings which render them inappropriate for many transactions. Quitclaim deeds transfer property title and nothing else. When purchasers require transfer assurances, warranties, or covenants, a different type of deed must be used.
Quitclaim deed fraud
This type of fraud is increasing and is often used to target the elderly. Common fraud tactics include:
- Convincing the property owner that transferring the property is a legitimate financial or tax planning technique.
- Threatening to withdraw medical, financial, or other necessary care unless the deed is signed.
- Using threats, coercion, or other high-pressure tactics to frighten the property owner into signing.
- Forging the property owner’s signature and having the quitclaim deed fraudulently notarized.
Sadly, there are many cases where individuals have been defrauded by strangers or relatives after signing a quitclaim deed based on verbal agreements for some future benefit. While verbal contacts are generally binding and enforceable under California Civil Code Section 1624 – sometimes called the “statute of frauds” — any contract for the sale of real property is invalid unless documented in writing. If someone asks you to sign a quitclaim deed in conjunction with a verbal promise to pay you for the property – do not do it. Consult a qualified real estate attorney for advice.