Quitclaim Deed in San Diego

The following blog explains what a Quitclaim Deed in San Diego is, how it works, and its advantages and disadvantages.

A quitclaim deed often occurs in family transfers or divorces between spouses who know and trust each other. They are helpful when the seller still determines their ownership interests in the property. Like as competing claims or unclear title issues.

 

San Diego Quitclaim Deeds

Unlike a warranty deed, there is no guarantee that the grantor owns the property free and clears a quitclaim deed. Grantors can only transfer what they own. For example, if he owns half, he can only transfer half.

Anyone can give a quitclaim deed, but it is only beneficial if the grantor owns the property. A quitclaim deed means you cannot sue the grantor for damages, making it risky for the grantee.

Generally, grandparents use quitclaim deeds in certain circumstances, such as:

• Transferring property to a child,
• Transferring property in a divorce,
• Or transferring property into a trust.

If you want to transfer property to an LLC, you can use a quitclaim deed.

With a quitclaim deed, the grantee must trust the grantor. In the absence of trust, the grantee should not accept it. California quitclaim deed forms vary from county to county. So make sure to obtain the form from the county where the property lies, just as they do with grant deeds.

 

Quitclaim Deeds Serve What Purpose?

It provides little to no buyer protection when transferring title to a property through a quitclaim deed. It’s not necessary to modify or add anything to the title. The grantor, the person giving away the property, gives the grantee their current deed.

Therefore, if the grantor has what may be considered a “bad” title, the grantee will receive it in its original state. Quitclaim deeds are common to settle disputes between family members or to correct a mistake in an original title.

Alongside quit claim deeds and fast claim deeds, the quit claims may also be called quit claims.

 

Quitclaim Deeds: How They Work

This form of conveyance does not provide any guarantee about the property’s title. Instead, it transfers to the grantee any ownership interest that the grantor (the person transferring the property) may have in the property.

An individual who owns the property currently and wishes to transfer it to another person prepares the quitclaim deed. As part of the quitclaim deed, the grantor must provide information such as:

• The grantor’s name,
• The grantee’s address,
• The legal description of the property,
• And the date of the transfer.

Notaries public witness the grantor’s signature on the quitclaim deed and verify their identity before sending it to the grantee. The grantee receives the original quitclaim deed signed by the grantor.

Creating a public record of the transfer of ownership and protecting the grantee’s ownership interest is achieved by filing the quitclaim deed with the county recorder’s office where the property resides.

In a quitclaim deed, the grantor does not guarantee that he has complete title to the transferred property, so they often appear where the grantor and grantee are familiar. The title to the property is still pending.

 

Do we need a Quitclaim Deed & When Do we Use It?

There are many reasons why quitclaim deeds may be necessary, but they often occur when transferring property between family members or spouses. For example, a divorce may result in transferring home ownership to one spouse through a quitclaim deed.

Using quitclaim deeds in estate planning can transfer the real estate into a Living Trust. Before moving real estate into a Trust, you must obtain Trustee approval, as quitclaim deeds do not affect mortgages.

Quitclaim deeds can also quickly reissue real estate titles if something happened during the initial transaction. In most cases, a quitclaim deed can correct spelling errors or missing signatures on the title.

 

The Best Advantages of Using a Quitclaim Deed

A quitclaim deed doesn’t protect buyers, so don’t use it during a traditional real estate transaction. It doesn’t guarantee a clear title, so it’s used when a property transfers outside a real estate transaction.

 

 

Get a consultation with a family law attorney before making a decision, in addition to whether any quitclaim deeds are being signed between relatives. Also, business partners or other parties involved should seek legal counsel. It is ideal for transferring a quitclaim deed when:

• Having property interest transferred from one family member to another, such as parents to children
• A marriage involving one party bringing the property into the marriage is a property transfer between married persons.
• When two spouses divorce, one relinquishes ownership of their property, and the other stays in the house
• Estate planning involves transferring property ownership from personal ownership to a living trust.
• It is essential to correct typographical errors on existing titles.

 

Using a Quitclaim Deed to Transfer Property

For a quitclaim deed to be recognized, it must be in writing. Apart from the legal description of the property transferred, a quitclaim deed also must contain the following:

• The county in which it lies.
• The date of the property transfer.
• The names of the persons transferring the property (grantor) and those receiving the property (grantee).
• It is also necessary to note the money exchange on the quitclaim deed. This deed form does not suspend any mortgage obligations.
• There is a requirement in most states that the quitclaim deed must reside with the county clerk. The sale deed is usually notarized but only sometimes by the grantor or person receiving the property.

When buying real estate, a quitclaim deed does not provide the level of protection a buyer should expect. The real estate agent advises buyers against using quitclaim deeds in arm’s length transactions.

 

Here’s How You Can File a San Diego Quitclaim Deed

You can file a quitclaim deed in San Diego relatively easily unless there are exemptions, which are a complex topic not discussed in this article. First, you must complete the quitclaim deed correctly and get it notarized.

Once you have the quitclaim deed, please take it to the county recorder’s office. Get the forms from the county where the property lies and fill out the Preliminary Change of Ownership Report, Documentary of Transfer Tax, and Notice of Exempt Transaction. There are forms available in the County Clerk’s, Recorder’s, and Assessor’s offices.

 

California Quitclaim Deed Costs

Like other states, San Diego charges a filing fee for a quitclaim deed that varies by county. A base fee of $15 applies in Los Angeles County, along with additional fees of approximately $87, and each additional page costs $3. Comparatively, the cost is reasonable.

 

Quitclaim Deeds: Basic Information You Need to Know

You should know what to expect when buying a property with a quitclaim deed because it provides minimal buyer protections.

 

It offers the Least Protection of All Deeds.

In a quitclaim deed, the grantor only transfers their interest in the property. It is also called a non-warranty deed. In the deed, there will be language such as, “No warranty or guarantee is made by the Grantor, express or implied, as to title in the property herein described.”

The grantor “remits, releases, and quitclaims” their interest in the property to the grantee. The grantee does not obtain any warranty rights against the grantor under a quitclaim deed if the grantor has no interest in the property.

 

Accept Quitclaim Deeds only from trusted grantors.

A quitclaim deed works best for low-risk transactions between people who know each other, as it does not guarantee the grantor’s title quality. It is, therefore, common to use quitclaim deeds to transfer property within a family.

For example, a parent might transfer a property to their adult child or between siblings, or a property owner might add their spouse to the title after getting married.

A quitclaim deed is also helpful for married couples who purchased a house together and subsequently divorced. When one party receives ownership of the home as part of the separation agreement, the other may execute a quitclaim deed to terminate their ownership interest.

 

You can use them to clear title defects.

As part of the recorded history of a property title, quitclaim deeds often rectify a defect (a “cloud on the title”). The title has myriad issues, such as issues with the formulation. For instance, the wording in a document isn’t in line with the state’s standards. Or the absence of signatures (such as husband and wife’s signatures) or the inability to document documents for real estate correctly. In the case of a misspelled grantee’s name on a warranty deed, it is possible to perfect the title if it contains the correct spelling.

For instance, the title search shows that the spouse of a former grantor holds an interest in the property as they did not correctly execute a prior deed. The spouse could have some interest in the land. When this situation occurs, the spouse of the past grantor can offer to give the current owner a quitclaim deed, which “quitclaims” the property from them.

 

They work as well as a warranty deed, but only when the title is good.

In the case of a good title at the time of delivery of a quitclaim deed, it can convey the title as effectively as a warranty deed. However, the lack of warranties makes a quitclaim deed less appealing to grantees.

In the event of a title defect, for example, the grantee cannot sue the grantor. If the grantor still determines whether the title is defect-free or does not want to be liable under the title covenants, he usually uses a quitclaim deed.

 

Quitclaim deeds affect ownership, not mortgages.

Therefore, it is typical for quitclaim deeds not to be used when a mortgage is outstanding on the property involved. With proceeds from the property sale, many grantors could pay off a mortgage.

Nevertheless, quitclaim deeds exist when the grantor has a mortgage. Even after the grantor has transferred ownership through the execution of a quitclaim deed, he remains liable for the mortgage. Titles pass with quitclaim deeds, but mortgages are not affected.

In such cases, the situation can become worse if the mortgage contains a due-on-sale clause, which stipulates that the whole loan is due at the time the title is transferred (as the name “due-on-sale” would seem to imply, the entire loan becomes due when the property sells for cash.).

The grantor only has recourse if the grantee stops making payments or sells the property if they quitclaim the property under the belief that the grantee would do so. A grantee can assume the mortgage (subject to lender approval) or refinance to reduce financial and legal difficulties. It is possible to draw a legally enforceable agreement for the grantor to protect them.

 

Tax Implications of a Quitclaim Deed in San Diego

In the same way, other deeds require payment of all back taxes; quitclaim deeds also require payment of all back taxes. U.S. Gift Tax Return (Form 709) is due if no money changes hands between the grantor and the grantee.

Transferring a deed to another spouse or placing it into a trust does not result in a gift tax. San Diego has a documentary tax, but it’s exempt if the grantor’s death caused the transfer.

To qualify for absolute property transfer tax exemptions, you must include them in the quitclaim deed. Capital gains taxes may apply if you try to sell the property later. You could also miss out on some exemptions. It would help to speak with your tax adviser about your real estate transfer.

 

Final Thoughts on a Quitclaim

Quitclaim deeds are valuable because they allow property ownership to pass quickly and economically. But they do not provide title or ownership guarantees or warranties.

The purpose of a quitclaim deed is to release the interest of any individual in a property without specifying their interest or rights or providing any warranty concerning those interests or rights.