Disadvantages to a Quitclaim Deed

Quitclaim deeds are real estate contracts that transfer property with no guarantee that the transferring party (the grantor) actually owns it. The party who receives the quitclaim deed (the grantee) does not necessarily receive ownership rights. Quitclaim deeds have both advantages and disadvantages; those with questions about using a quitclaim deed for a specific real estate transfer should ask a legal or real estate professional.

Deeds are legal documents that prove the transfer of real estate from one owner to another. However, deeds do more than prove the transfer. They also contain any rules, promises, conditions or other special information included in the transfer. (Many deeds do so by referring to a real estate transfer contract that contains all of these items.) Different types of deeds contain different promises by the grantor regarding his title to (ownership of) the property. The level of guarantee offered by the grantor in the deed defines the type of deed. If the grantor breaks his promises in the deed, the breach provides a basis for the grantee to sue the grantor.

Quitclaim deeds lack of any promise of ownership on the part of the grantor. A quitclaim deed states only that the grantor is giving the grantee any interest he may have in the property. Each state has its own regulations defining the language and form of a valid quitclaim deed, but the effect is the same: the deed does not guarantee ownership for the grantee.

The quitclaim deed contrasts sharply with other types of deed, such as general warranty and grant deeds. Grant deeds promise that the grantor has not transferred away any part of his interest in the property. General warranty deeds promise more or less complete ownership. They guarantee that the grantor has not transferred any part of his interest. And they guarantee that none of the previous line of grantors transferred away any part of their interests.

The great disadvantage for the grantee who takes property using a quitclaim deed is the fact that if events prove that the grantor had no title, or limited title, to the property, the quitclaim deed does not allow the grantee to sue the grantor. Note, however, that the grantee can still sue the grantor if the grantor was actively fraudulent in the transfer. However, grantees still have the option to make a title search of the property. Title searches can often reveal potential problems with the grantor's title.