What is a Quitclaim Deed?
It is a legal instrument used to release one person's right, title, or interest to another without a guarantee or warranty of title. In the realm of real estate transactions, the quitclaim deed can be a powerful yet often misunderstood tool. Understanding the process of filing a quitclaim deed is important for individuals navigating property transfers. In this short guide, we'll shed light on its usefulness, explore the steps to file a quitclaim deed in Michigan, discuss strategies to safeguard against false claims on property ownership and other considerations to keep in mind when filing.
Why use a Quitclaim deed?
1. Family Transfers:
Quitclaim deeds are often used in family transfers, allowing for the easy transfer of property between family members.
2. Divorce or Separation:
In the case of divorce or separation, a quitclaim deed can be employed to transfer ownership as part of property settlement agreements.
3. Estate Planning:
Individuals often use quitclaim deeds as part of estate planning to transfer real property to beneficiaries.
4. Resolving Ownership Disputes:
Quitclaim deeds can be used to clear up ownership disputes or uncertainties about property interests.
So what is the process of filing a Quitclaim Deed like?
1. Obtain the Quitclaim Deed Form & Fill it Out:
- Begin by obtaining the appropriate quitclaim deed form. These forms can be found at office supply stores, online, or through your county register of deeds.
- Accurately fill in the details, including the legal description of the property, names of the grantor and grantee, and other required information. Understand the requirements of the county you are in. As an example, see Kent County's requirements.
- Sign the deed in the presence of a notary public. Both the grantor and the notary must sign the document.
2. Verify Recording Fees:
Check with the local register of deeds office in the relevant Michigan county for the current recording fees. Ensure you have the correct amount.
3. Visit the Register of Deeds Office & Submit the document:
- Take the notarized quitclaim deed, along with the recording fee, to the register of deeds office in the county where the property is located.
- Submit the quitclaim deed for recording. The register of deeds will assign a document number and officially record the deed.
- After recording, request a copy of the recorded quitclaim deed from the register of deeds office.
It's just that easy to file a Quitclaim Deed.
Maybe too easy...
The process of filing a quitclaim deed is relatively straightforward, and it's intentionally designed to be accessible for individuals to transfer ownership interests in real property. While the process itself may be simple, here are a handful of considerations to be aware of:
Further considerations:
1. Legal Implications: Filing a quitclaim deed transfers the grantor's interest in the property to the grantee without guaranteeing the quality of that interest. Unlike a warranty deed, a quitclaim deed provides no warranty or guarantee regarding the title. The grantor is essentially conveying whatever interest they have in the property, without making any promises about the title's validity.
2. Title Issues: Before accepting or filing a quitclaim deed, it's important to conduct a thorough title search to identify any existing liens, encumbrances, or other issues that may affect the property's title. The grantee receives the property subject to any existing title defects.
3. Tax Implications: Transferring property through a quitclaim deed may have tax implications, and individuals should be aware of potential capital gains taxes, property transfer taxes, or other tax consequences. Consulting with a tax professional is advisable.
4. Family or Business Relationships: Quitclaim deeds are often used in family or business transactions, but it's crucial to consider the implications on relationships. Clear communication and understanding between the parties involved are essential to prevent misunderstandings.
Who is at risk for false claims, and what safeguards are there?
Any property owner could be, but there are certainly groups of people with higher risk by scammers such as the elderly, absent property owners, those going through financial hardships, and people with unmortgaged properties (no lender involvement/oversight). There are ways to keep tabs on a property to safeguard it from scammers.
1. Regular Title Searches: Conduct regular title searches to identify any unauthorized or false claims on your property. Two local title companies we would recommend to engage for any title work or monitoring are First American Title and Transnation Title Co.
2. Monitor County Records: Most county websites have ways of searching the owner of record from the comfort of a digital device. As an example, there are two places to look on Kent County's site: a) Property Search and b) Deeds Records. Both are hyperlinked.
2. Title Insurance: Your lender’s title policy will last only as long as your mortgage loan remains outstanding. Once you’ve finished paying off your mortgage, your lender’s insurance coverage will end (since your lender’s interest in your property will have ended as well). You might consider getting an owner's title policy so there is still oversight and protection.
