A quitclaim deed can be a useful tool, but it comes with some disadvantages that should be considered. In this document, a grantor relinquishes all interest and rights in a property to a grantee. This is not the same thing as a warranty deed, in which the deed of title for a property is fully transferred to a new owner. Having a quitclaim deed, in other words, is not the same thing as owning a property free and clear.
One classic setting in which a quitclaim deed might be used is to clear a title. During a title search, it may revealed that a group or individual has an interest in the property. This group or individual can sign this document to release all interest in the property, clearing the title to make it possible to transfer. In divorce proceedings, this type of deed is also used to release all rights when one partner has agreed to give up interest in real property. Grants of land and property to family members can also be accomplished through such a deed.
One of the key disadvantages for the grantor is that signing this document does not release someone from a mortgage. If money is still owed under the grantor's name, it must be repaid. For grantees, getting a quitclaim deed can be a problem for a number of reasons. Properties surrendered under such deeds are often difficult to finance, and getting people to release their interest does not necessarily mean that the grantee now owns the property free and clear. The property can still come with liens and other financial liabilities.
Once this type of deed has been signed, it is a difficult thing to undo. This is an important thing to consider before signing the paperwork. Grantors should decide whether or not they really want to transfer their interest in the property; signing the deed means that they are not entitled to proceeds from a sale, for example, if the property is sold.
It is a good idea for all parties involved to consult their lawyers before finalizing a quitclaim deed. Lawyers can provide advice about the implications of the specific situation, and they can draft a document that is accurate, appropriate, and fully legal to ensure that there are no complications in the future. It may also be advisable to contact an accountant to discuss the financial implications of the deed.