Quitclaim Deed Form

What Is a Quitclaim Deed?

A quitclaim deed is a legal document mainly used to transfer real property between a Grantor (current owner) and Grantee (new owner). Quitclaim deeds don’t promise a clear title, and the Grantee has limited legal options if issues arise.

Quitclaim deeds are generally used to transfer ownership between family and friends, address errors in the original deed, or adding or removing names quickly from the deed.

How Do Quitclaim Deeds Differ From Other Types of Deeds?

The biggest differences between quitclaim deeds and other types of deeds are that quitclaim deeds are faster, but also provide the least protection to the new owner.

Here are the main deed types, their primary purposes, and main uses:

When Are Quitclaim Deeds Used?

Here are the most common uses for quitclaims:

1. Transferring Property Between Family. Quitclaims are used between family members, for instance, by parents transferring property to their children as gifts and placing property into a family trust.
2. Marriage and Divorce. Quitclaims are used for adding a spouse’s name to the property title after marriage or removing a spouse’s name during divorce proceedings.
3. Adding A New Owner To a Deed. When a property owner wants to add a new owner, they can use a quitclaim deed in real estate transactions to formally transfer ownership rights to both themselves and the new owner while ensuring an accurate chain of title.
4. Transferring Property From Owner to LLC. Transferring rental property to an LLC is a strategic choice for legal protection and tax benefits. This involves changing the property’s title from the owner’s name to the LLC’s.
5. Fixing Errors In Deeds. Quitclaim deeds are helpful legal instruments that can be used to correct errors or make specific changes in property deeds, including:

• • The property’s legal description
  • The amount of consideration (the price paid for the property)
  • Names of title holders
  • Names of Witnesses
  • Additional information required for compliance

Quitclaim Deed Legal Variances by State

Quitclaim deeds serve the same fundamental purpose across most states, but legal requirements, recording procedures, tax implications, and enforceability can vary significantly. Moreover, the extent to which a quitclaim deed can transfer ownership interests can be different depending on state laws and common law practices.

Pros and Cons of Using Quitclaim Deeds

• Simple. Quitclaim deeds are short and easy to use. Templates are available and easy to find online, and can usually be filled without the help of a professional.
• Versatile. Quitclaim deeds can be used for more than just property transfers, including informal agreements between known parties.
• Quick. Quitclaim deeds are relatively quicker to execute. Unlike other deeds, a prior title search is not necessary, making it faster to implement.
• Cost-Effective. Compared to other deeds, quitclaims are likely to have lower costs as professional assistance is not needed.

• Unsecure. A quitclaim deed provides no guarantees regarding the quality of the title.
• Increased Liability. The grantee assumes the property “as is,” including any defects in the title. With a quitclaim deed, the grantee thus takes on added liability for the property, including any other issues associated with it.
• Risk. Quitclaim deeds are susceptible to future claims by third parties with a legal interest in the property.
• Often Unsuitable. Quitclaim deeds are not suitable for all types of property transfers, including real estate sales involving an outstanding mortgage.

Can you Prepare Your Own Quitclaim Deed?

In most states, you can prepare your own quitclaim deed as they are not required to be prepared by a professional. If a third party prepares the quitclaim deed, their name and address must be mentioned on the deed.

Lawyer Required at Closing

On the rare occasion that a quitclaim deed is used in an actual sale, some states require that an attorney be required to be present during the closing. These ‘attorney-only’ states include:

• Alabama
• Connecticut
• Delaware
• Georgia
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Mississippi
• New Hampshire
• New Jersey
• New York
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• Vermont
• Virginia
• West Virginia

Who Signs a Quitclaim Deed?

All quitclaim deeds typically require the signature of the grantor, acknowledged or attested by a notary. Based on the state’s Homestead laws, the signature of the grantor’s spouse may be required.

Moreover, depending on the state, additional witnesses may be required as well. In a few states, the grantee’s signature is also required.

Here is an overview of state-specific quitclaim deed signing criteria:

How to File a Quitclaim Deed

Filing a quitclaim deed is simple and straightforward. Here is the process to file a quitclaim deed:

1. Obtain a Quitclaim Deed Form. Obtain a state-specific form online or at your county recorder’s office or an office supply store.
2. Fill Out the Quitclaim Deed Form. Gather property details, including the legal description and Assessor’s Parcel Number (APN).
3. Notarize the Quitclaim Deed. All quitclaim deeds require notarization, however, the exact notarization requirements vary by state:
   1. The Notary Witnesses the Signature. Sign the document in the presence of a Notary, who will witness and verify your identity.
   2. The Notary Acknowledges the Signature. Sign the document beforehand, and the notary public will confirm your identity.
4. File the Appropriate Paperwork.
   1. Check your state and county recorder’s website for additional required documents when transferring properties, e.g., a county cover page in New York State.
   2. Gather necessary documents, such as proof of paid Documentary of Transfer Tax (if applicable) or Notice of Exempt Transaction (if applicable).
5. Pay Any Necessary Fees. There are several types of fees that may have to be paid in order to file a quitclaim deed. These include:
   1. Recording Fees. Paid to officially record the deed, costs vary by state and county, typically ranging from a few dollars to several hundred dollars.
   2. Transfer Taxes. Some states impose taxes on property transfers, based on property value or consideration exchanged; these can vary widely.
   3. Notary Fees. Required for notarizing signatures on the deed, costs vary by location, typically around $25 per signature or less.
6. File the Quitclaim Deed at the County Recorder’s Office. Visit your county recorder’s office to officially record the deed in the public record.

Where to File a Quitclaim Deed

Deeds should be recorded in the county where the property is located, either with the Recorder of Deeds or the designated County Clerk’s Office. While the deed is legally valid upon signature, it’s important to record it to ensure it serves as an effective notice to creditors and other potential buyers.

Cost to File a Quitclaim Deed

While the cost of filing a quitclaim varies by state, the amount is usually between $5 per page to $25. Typically, the amount will include filing fees or recording fees, deed transfer and mortgage taxes due upon filing, and county fees if any.

Quitclaim Deeds are typically not used to transfer properties with a remaining mortgage balance as it triggers the “Due-on-Sale” clause which is a provision that requires the borrower to repay the amount in full if the property is sold/transferred.

Taxes Owed on Quitclaim Deeds

Taxes on quitclaim deeds vary by state, with federal gift tax rules typically governing their taxation.

Gift Tax Rules

Quitclaim deeds, unless used to transfer property between spouses, can trigger the following gift tax implications:

• The transfer must be reported to the IRS using Form 709.
• Gift taxes, paid by the grantor, range from 18% to 40%.
• The IRS closely monitors parents transferring property to adult children to prevent tax avoidance.

Gift Tax Exemptions

In certain situations, quitclaim deeds may be exempt from gift tax rules:

• In 2023, individuals can gift up to $17,000 annually without incurring gift tax
• Couples can jointly give up to $34,000
• There’s a lifetime exemption of around $11.5 million.

Capital Gains Tax

Using quitclaim deeds to transfer property can also trigger capital gains tax:

• If a quitclaim deed is used without an exchange of value, it can lead to capital gains tax later on.
• When the grantee decides to sell the property, they may have to pay taxes on the difference between the property’s value at the time of the original transfer, and the selling price.
• The grantee will owe taxes on the “profit” made through the sale.

Property Tax and Liens

Quitclaim deed transfers are subjected to existing property taxes and liens:

• Since quitclaim deeds do not require a title search, outstanding property taxes, and liens can easily go unnoticed.
• If the grantor has not paid the owed taxes and liens, the government could legally claim the property, and the quitclaim deed transfer could be invalidated.

Tax Exemptions

Quitclaim deeds may not trigger tax in certain situations:

• Clarifying ownership.
• Divorce-related property changes.
• Charitable donations.
• Moving property into or out of a revocable trust.

What Should Be Included in a Quitclaim Deed?

There are several key elements that are essential to understand when transferring property ownership through a quitclaim deed. These include:

Where to File Quitclaim Deeds

While a quitclaim deed is typically valid upon signature, in most states, its legal effectiveness is limited until it is officially recorded. Filing the quitclaim deed at a state-designated local office not only secures the grantee’s rights to the title but also serves as notice to creditors and potential buyers.

Here is a state-by-state list of where to file a quitclaim deed: