In all matters of real property, ownership and transfer of ownership is incredibly important. Whether a piece of property is being bought, sold, deeded, or bequeathed, handling the paperwork should be handled by an experienced real estate attorney or title company. So what exactly is a quitclaim deed and why would you need one?

A quitclaim deed, often abbreviated in the real estate world as a QCD, is a written, legal document that transfers ownership (title) of real property. The QCD simple conveys whatever interest exists when the deed is executed, but does not offer warranties or guarantees that the owner has title or ownership. This is rarely used in a purchase and sale of a piece of property, since the owner makes no guarantees that the title is free and clear (owned without any encumbrances). So, if the deed offers no warranties or guarantees on the property, why would someone use it to transfer their interest? QCDs are often used for a few reasons:

Gifting property – Giving property to family is a good use of a QCD. You may want to give your children your second home as a starter home, or it may be a gift before entering a nursing home. Whatever the reason, a quitclaim deed is a good solution. Hopefully your family understands the liens, debts and encumbrances that come along with the property, if it is not owned free and clear, and they understand that they are taking on those responsibilities in addition to owning the interest in the property.

Moving property from entities – Many business owners will use a quitclaim deed to transfer property from personal to business, or vice versa. This is incredibly important for tax reasons; if they had to buy originally off of personal credit before the company was established, they may want to transfer the property as soon as possible to help when tax season rolls around.

Deeding off of a property – Divorce tends to lead to quitclaim deeds, and this is an important point to recognize. The “grantor” is essentially “quitting” their interest in the property, so in the event of a divorce, and the subsequent divvying up of Berkeley real estate, the partner who was not granted the property will need to QCD themselves off of the title.

Changing a name – Did you buy your property before saying “I do”? Many young couples are now buying a home to make ready for their marriage. This is a great way to start a marriage, but the woman is no longer recognized with her maiden name. A quick QCD will fix that and will ensure her interest in the property.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.

Advertisements