Can You Quick Claim Property to Avoid a Lien?

People sometimes call the quitclaim deed a quick claim, as it is a quick way to transfer real estate ownership from one person to another. The correct term is quitclaim, due to the fact it is a way for the issuer to “quit” his interest he has in a piece of property. Sometimes people use a quitclaim deed to shield property they own from a potential personal judgment lien, and the tactic can work. Yet, it typically won’t work to eliminate an existing lien on the property.

Deeds are the documents used to convey title or interest in real estate from the grantor of the deed to the grantee, or the party receiving the deed. There are a number of deed forms, with the quitclaim being one that conveys only the interest that the grantor has in the property. If the grantor owns the property, then the grantee receives ownership of the property by virtue of the deed. Yet, if the grantor doesn’t actually own the property, then he conveys only whatever interest he has in the property to the grantee.

A quitclaim deed only “quits" the grantor’s interest in the property; it does not “quit” claims that a third party has against the property. For example, if a buyer purchases a house and accepts a quitclaim deed, the quitclaim deed does not remove any claims a mortgage holder has on the property.

If someone is concerned about having a lien placed on his property from a potential future lawsuit, quitclaiming the property to another person takes it out of his name, and possibly out of the reach of a judgment against him. Those who try this normally transfer the property to a trusted family member or friend. Yet, this won’t protect the property from liens resulting from debts generated from the property, such as a property tax lien or a mechanics lien. A mechanics lien results from work done on the property, such as the roofer who replaced the shingles on a house located on the land.

The quitclaim deed only conveys whatever interest the grantor has in the property as of the date of the quitclaim deed. Therefore, when determining if the quitclaim deed protects the property from a lien, one factor is the grantor’s rights and responsibilities as of the issue date of the deed. He might discover that because of some legal action, he no longer had the right to convey title on the date he issued the quitclaim deed. Another consideration is local laws, as real estate laws and procedures involving quitclaim deeds vary by state.