LEGAL CORNER with ANDREW PINEIRO, Esq.
Q: What is the most cost effective way for me to transfer ownership of my house to my only adult child?
A: The quickest and easiest way to transfer non-homesteaded real property is by quitclaim deed. So, what is “quitclaim deed?”
Quitclaim deed is legally defined as “a deed of conveyance operating by way of release; that is, intended to pass any title, interest, or claim which the grantor may have in the premises, but not professing that such title is valid, nor containing any warranty or covenants for title.”
By comparison, a “warranty deed” is legally defined as a deed in which a grantor warrants good, clear title and explicitly contains covenants concerning the quality of title it conveys.
A quitclaim deed is often used when a real property transfers ownership without being sold. Often times, no money is involved in the transaction (i.e., conveyance between family members), no title search is done to verify ownership, and no title insurance is issued.
Quitclaim deeds are a quick way to transfer property, most often between family members. Examples of when a quitclaim deed can be utilized include when an owner gets married and wants to add a spouse’s name to the title or deed, or when the owners divorce and one spouse’s name is removed from the title or deed. In other cases, a quitclaim deed can be used when parents transfer property to their children or when siblings transfer property to each other. Some families or parties opt to put their real property into a family trust, and a quitclaim deed can be used then as well.
Another time that a quitclaim deed might be used is when a title insurance company finds a potential additional owner of a real property and wants to make certain that this person does not make a future claim of ownership. In that case, the insurance company would ask that person to sign a quitclaim deed to remove any potential interest from the property.
It is important to recognize that a quitclaim deed impacts only the ownership of the house and the name on the property deed or title, not the mortgage (or other encumbrances). For instance, in the case of a divorce, if both ex-spouses’ names are on the home mortgage loan, they are both still responsible for the mortgage payments, even if a quitclaim deed has been signed and recorded.
Do you need a quitclaim deed? It might make sense to use a quitclaim deed if you are a parent who wants to transfer a home to your children, or if you recently got married, when a spouse wants to add the other to the title of their property. One of the biggest benefits to using a quitclaim deed is that it avoids the costs associated with a title search or title insurance. However, note that in the typical purchase/sale scenario, the purchaser should not accept a quitclaim deed for the conveyance, since the purchaser will not receive any guaranty or protections related to the validity of the title.
There are other methods of passing title and making conveyances of real property. An estate planning lawyer should be consulted if you are thinking of succession planning for your property. For any of these instruments to work properly, they must be drafted carefully and precisely, and executed perfectly. Everyone has a different factual situation and a different family dynamic, so it is imperative that you consult a real estate attorney and/or an estate planning attorney for advice if you are considering taking any action to convey real property.
Andrew Pineiro, Esq., Pineiro Byrd PLLC,
4600 Military Trail, Suite 212, Jupiter, Florida 33458, apineiro@pblawfla.com
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