When a grantor of the land property transfers interest in the land to another person, known as grantee through a deed, that deed is known as a Quitclaim deed. This kind of deed is usually made when the ownership of the real estate properties is transferred from one person to another. In this deed, the grantor provides certain warranties to the grantee regarding the title that it is clear. There are also two other types of deeds – general warranty deeds and special warranty deeds.
However, the quitclaim deed has a drawback. It only transfers some of the rights to the grantee, but doesn’t provide complete ownership. When the grantor signs such a deed, he agrees to sell all his rights in the property. However, the property is yet not sold completely.
A general warranty deed offers benefits that are not covered in a quitclaim deed. A quitclaim deed only transfers interest. However, a general warranty deed covers six different covenants. These are – covenant of seisin, covenant of right to convey, covenant against encumbrances, covenant for quiet enjoyment, covenant of warranty, and covenant for future assurances.
Prima facie, it looks as if a general warranty deed is much better than a quitclaim deed. However, if considered closely, a quitclaim deed would be preferred over any other kind of deed in some cases. A quitclaim deed doesn’t give you the ownership of the property but certainly gives you the interest that were first held by the grantor.
Besides, when there is no need to transfer the ownership, quitclaim deed is probably one of the easiest way to just change interests. It is used frequently in intra-family transfers. If there is a divorce among a couple, for instance, a quitclaim deed is used to share interests. In such cases, the home cannot be sold by a single individual as the interests are shared, and it requires consent from all the interest holders to sell a house.
There are also other uses such a deed. If a home is inherited by a group of siblings, a quitclaim deed needs to be made in order to sell the house. If the siblings also hold the ownership of the home, any of them can sell their share and use a quitclaim deed to transfer his interest to the new owner.