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Quitclaim deeds are most often used to transfer property within a family. For example, when someone gets married and wants to add their spouse to the property, or a couple gets divorced and wants to exclude one person from the property. They can also be used to transfer property from parents to children, or between siblings. Sometimes, they can even be used to avoid having the property involved in a litigation or lawsuit.
However, there are two problems you need to be aware of before using a quitclaim deed.
1. The quitclaim deed only impacts the name and ownership of the property, it does not affect the note of the mortgage. For example, let’s say a couple is going through a divorce. If part of the divorce settlement is that one of the spouses is going to keep the property and both are listed on the mortgage, removing one of the spouses from ownership does not exclude the responsibility of that spouse within the mortgage. They will still be responsible. The only way to be totally free of the mortgage responsibility is to sell or refinance the property.
2. If you are thinking of removing your name from the property in order to not be tangled in litigation, or you bought the home for someone else and want your name removed and their name added, the mortgage also gets in the way. If you are the sole person on the deed and mortgage and you remove your name from the deed and the bank finds out, the only alternative they have is to enact the acceleration clause of the mortgage, which results in a foreclosure. Then, the only thing the bank has to protect their interest with the note is the property itself. It’s the only legal recourse they have, and it’s a very quick foreclosure.
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Consult an attorney before using a
quitclaim deed.
”quitclaim deed.
If you’re thinking about doing anything with a quitclaim deed, consult an attorney first so you are on better and safer ground. If you have any questions for me or need any additional information, don’t hesitate to give me a call or send me an email. I would be glad to help out!
