Limitations Of A Quitclaim Deed
A quitclaim deed is a document you use to transfer property to another party without stating or guaranteeing your interest in the property. When you transfer property to another person using a quitclaim deed, you are the grantor and the recipient of the property is the grantee.
People use quitclaim deeds, for example, to transfer properties to their family members. For example, you may use it to give your property to your brother. Unfortunately, it does have some serious limitations, such as these three:
The Grantor Retains Their Financial Obligations to the Property
While a quitclaim deed relieves the grantor of their interest in the property, it doesn't relieve them of their financial obligations to the same property. For example, if your parent grants you a property via a quitclaim deed, they are still responsible for the financial obligations related to the property even though you are now the actual owner of the property. If your parent had used the property as collateral for the loan, the financier could still reclaim the property if the loan isn't repaid. In fact, the grantor will still be responsible for paying taxes or rates on the property.
It Doesn't Guarantee Ownership of the Property
When you receive a property via a quitclaim deed, it doesn't guarantee that you actually own the property. You only receive legal ownership of the property if the grantor also had its legal ownership. Your quitclaim did will just be a worthless piece of paper if the grantor didn't have legal ownership of the property.
Consider an example where your parents deed you their house via a quitclaim deed. If it turns out that they did not own the house, and that it belonged to the back, you won't have any claim to the house despite the existence of your quitclaim deed.
It May Not Be Accepted In Some Forms of Property Transactions
With the serious limitations that quitclaim deeds have, it's not surprising that they aren't acceptable in some forms of property transactions. For example, selling your property will be difficult if all you can show for its ownership is a quitclaim deed. The quitclaim deed doesn't guarantee your interest on the property, and the buyer may not want to be involved in any future disputes.
State laws determine what rights are granted by a quitclaim deed, and which information it must contain. Therefore, before engaging in a property transaction involving a quitclaim deed, consult a property law attorney, like one from Zane Law, before making a move.