This is a legal document that officially transfers the rights to a property from one party to another. It consists of the interest the party relinquishing the property holds at that time, and nothing else. As a rule, it is used in regard to family members, couples who are divorcing, or other business dealings between two individuals who are well-acquainted. Note also that its main purpose is to prevent the Grantor from claiming that they have an interest in the real estate later on.
In detail, the document is used for the following purposes:
● Transferring property between parents and children, siblings or other family members who are close relatives can be done simply by using a quit claim deed.
● Following a marriage or divorce, real estate owners often use this document to add or remove a spouse from the property title.
● Today, real estate is often protected by an LLC or corporation, and the transfer of property is usually done with the quit claim deed. In such cases the two parties involved in the transfer are generally closely related.
● Transferring real estate to a trust is also quite common. When property is to be handed down from one generation to another, this is often begun by transferring real estate from a family member to a trust by with this legal document.
● When the title insurance is being purchased, the insurer may find a “cloud” in the existing title. This means that it is unclear whether an individual does (or does not) have an interest in the property, and that it is otherwise unaccounted for. Often, the insurer will require this person to quit claim their interest before the title insurance can take effect.
Essential elements of this legal document
While every county in the United States has its own requirements for completing a quit claim deed form, these basic elements are found in any deed related to real estate:
● The title of the legal document, which clearly states what the document is.
● The date on which on which it was completed, signed and became legally binding.
● The party(ies), known as the Grantor, who is transferring their right to the property to someone else. This may be an individual, an LLC, a Partnership, a Trust or Trustee, or some other entity that is legally entitled to own real estate.
● The party (parties), known as the Grantee, who will receive the rights to the property when they are legally transferred.
● The heart of the quit claim deed form, known as the habendum, in which the rights to the real estate are transferred. The wording is usually similar to this: “…does hereby remise, release and quitclaim unto the said Grantee forever, all the right, title, interest and claim which the said Grantor has in and to the following described parcel of land, and improvements and appurtenances thereto…”
● Consideration is what the Grantee gives to the Grantor in exchange for the property rights mentioned in the document. Although some of these deeds can be enforced without this feature, omitting it can lead to complications later on in regard to taxes on the real estate.
● The document also contains a legal description of the real estate being transferred from the Grantor to the Grantee, and its format varies from one state to the other. The categories of legal descriptions in use are rectangular, metes and bounds, and lock and block, which is used most frequently. A typical example of this kind of description would be “QCD SUBDIVISION, 2ND AMD, LOT 112 BLOCK 3.”
● Most states only require the Grantor to sign the deed, which an attorney prepares, and it is validated when it is delivered to the Grantee and accepted. As a rule, the Grantor’s signature has to be notarized, and there are also rare cases in which other witnesses must be present when the Grantor signs the document.
How the deed is validated
In most states, this legal document is considered to be valid when the Grantor has signed it and the Grantee accepts it when it is delivered. This means that nothing else is required in order to complete the transfer of the property.
What you should do
Legal experts suggest that you should protect yourself from any claims that may be made on the title in the future by having the deed properly recorded with your local register or recorder of deeds. This should be done as quickly as possible once the document has been delivered to and accepted by the Grantee. A copy of this record will be sent to the title insurance company, the Grantor and the Grantee, and by taking this step, you will verify the exact time when the Grantee was given an interest in the property that was transferred.