What is a Quit-Claim Deed

When someone owns a property and wants to give-up responsibility for it a U.S. Quit-claim Deed is used to transfer ownership to either another person or a business entity. But although ownership has been transferred liabilities for the debt of the property may not have been relinquished. Here will be briefly discussed a few scenarios that explain how the quit-claim deed is most often used and what it's sometimes hidden limitations are; by gaining a basic understanding of this American legal instrument will help to circumvent some pitfalls and associated financial liabilities.

General Use of the U.S. Quit-Claim Deed

This is a term used to describe a legal instrument that can be used to transfer or quit any and all interests in a piece of property without any promise or guarantee and gives full title, ownership of that property to another person or business entity. The person or business that gains title of the property only acquires the same rights and interests that the previous owner had without any warranties of ownership. The deed releases the original owners share and interests in a property without stating what those interests or rights were and most importantly without stating whether the original owners claim is valid or not.

But the quit-claim deed does prevent the person or business that has made the transfer of ownership from claiming any interest in a property at a later date.

Quit-claim Deeds are used to transfer real estate between family members, transferring a property into a business entity such as machinery or intellectual property in exchange for company stock and it can be used to settle debt.

Quit-Claim Deed used in Divorce Settlement

This type of deed is often used in divorce settlements to transfer full interest in a property that has been jointly owned or rented as joint tenants. Lets suppose that a married couple owned their own home in joint tenancy and the wife for example was awarded the family home by the divorce court then the husband could use a quit-claim deed to give-up his interest in the property. In this situation the title or names on the property are then changed to the wife's' name but responsibility for debts and the mortgage has not been transferred. Which means that the husband in this example would still carry liability for the debt of the family home unless he removes himself from the mortgage and any other loans secured with the family home which may also include utility bills. After the quit-claim deed has been executed by the husband to transfer the real estate to his divorced wife any profit or proceeds from the sale of the home is kept by the wife. The husband would have no claim for sharing money gained from the sale of the home.

Quit-claim deeds are also used in property auctions to pay off outstanding taxation debts.