Wednesday, July 27, 2011
How Does A Quit Claim Deed Work?
People who own several real estate properties may, at some point in their lives, turn over a house to another person such as a sibling, give it as a gift to a child or grandchild or sell it. During these instances, the owner is required by law to execute a quit claim deed to make sure that he or she will no longer claim interest on the property.
A quit claim deed is a legal document that clears title to the property. It is used in the transfer of an interest on a property to another person. By its name alone, it means the owner quits any claim on a house or land. The person who is quitting claim is known as the grantor while the one who accepts the property is called the grantee. The grantee assumes all risks especially if no guarantees or warranties are made on the title.
The deed, however, only transfers interest and does not guarantee if the grantor actually has ownership rights on the property concerned. It also does not ensure that the property is without debt.
In order for it to be enforceable, the deed has to be signed by the grantor after which a notary public should sign and stamp it. In some states, though, the grantee and other witnesses are required to affix their signature as well. Apart from a notary public, officials from states other than where the property is located can also notarize the deed.
There are different situations in which a quit claim deed can be of great help. For married couples, a spouse who was able to purchase a property before marriage can add or remove the name of his husband or wife to or from the property title. In a divorce situation, a couple can transfer ownership of their conjugal property to one spouse.
During the sale of a house, a quit claim deed executed at closing transfers the property interest from the seller to the buyer. In other words, the seller totally disposes of the property rights and guarantees that he or she will no longer go after it whatever happens.
Another situation where the deed can be used is if a certain homeowner plans for an estate or a living trust. In this case, the deed transfers the ownership of his house into a trust fund.
If a life estate is involved, the grantor can still keep his right to possess the property even after signing a quit claim deed. A life estate usually gives the owner the absolute right to stay at the property until death. It is only after the owner's death that the grantee is able to get the right to possess the property.
It is important to understand that once the deed is signed, it will be hard to reverse or undo the deed. Only if the grantee agrees to quit claim the property back can the previous owner possess the property again. Otherwise, the grantor will have to show proof that the transfer was invalid.
A quit claim deed is a valid option for giving up property interest. But since transfer of title or ownership rights is not guaranteed by this document, it is best accompanied by a warranty deed.
Article Source: http://EzineArticles.com/1524530
Posted by Anonymous at 10:12 AM