Utah Rea Estate Code: Form of Quitclaim Deed – Effect
A conveyance of land may also be substantially in the following form:
QUITCLAIM DEED
____ (here insert name), grantor, of ____ (insert place of residence), hereby quitclaims to ____ (insert name), grantee, of ____ (here insert place of residence), for the sum of ____ dollars, the following described tract ____ of land in ____ County, Utah, to wit: (here describe the premises). Witness the hand of said grantor this __________(month\day\year).
A quitclaim deed when executed as required by law shall have the effect of a conveyance of all right, title, interest, and estate of the grantor in and to the premises therein described and all rights, privileges, and appurtenances thereunto belonging, at the date of the conveyance.” For a boundary line agreement operating as a quitclaim deed as described in (2) Section 57-1-45 , the boundary line agreement shall include, in addition to a legal description of the agreed upon boundary line: the signature of each grantor;
a. a sufficient acknowledgment for each grantor’s signature; and
b. the address of each grantee for assessment purposes.
c. “QUITCLAIM DEED
Legal Effect of a Quitclaim Deed
A quitclaim deed can be used to either release a claim of ownership or transfer ownership of property. It is most commonly used to release a claim of ownership in order to resolve a dispute, such as in a divorce case. When used to transfer ownership as part of a sale of the property, a quitclaim deed gives the buyer the least assurance under the law that he is receiving good title to the property.
Function
A quitclaim deed is identifiable by the inclusion of the key phrase “quitclaims and releases” in the deed. The person signing the deed–the grantor–is releasing whatever interest he has in the property to the grantee–the person receiving the quitclaim. The grantee is not necessarily receiving any rights in the property, only a release from any claim by the grantor to the property.
No Warranties
Although a quitclaim deed can be used to transfer ownership of property, it is the least effective way to do so. In a typical arms-length sale of property, a warranty or grant deed is used to convey title to the property from the seller to the buyer. The purpose behind using these types of deeds is to provide the buyer with at least two important warranties from the seller: that the property has not sold to another buyer, and that title to the property is free and clear of any liens or mortgages. These warranties obligate the seller to pay damages to the buyer if title to the property is not clear after the sale. A quitclaim deed does not contain any warranties, and there is no obligation on the part of the seller to deliver clear title.
Typical Use
Because the primary function of a quitclaim deed is to release a claim to property, a quitclaim deed is ideal for use when resolving a property dispute. For this reason, quitclaim deeds are typically used in disputes involving a “clouded” title. Once the parties reach a settlement of their dispute, the title can be cleared using a quitclaim deed. This most often occurs in intra-family disputes, particularly in divorce cases.
Quitclaim Requirements
The complete requirements for a valid quitclaim deed will vary from state to state; however, there are some basic requirements for all quitclaims. The deed must identify the grantor—the person transferring the property ownership—and the grantee—the person receiving the property ownership. A full legal description for the property must be included, in addition to the property address. The deed should identify the county where the property is located and identify any consideration that is, the purchase price or a statement that the property is a gift. The deed must be signed by the grantor in the presence of a notary.
Misconceptions
A common misconception is that a grantor can easily reverse a quitclaim deed after it has been signed and delivered to the grantee. In fact, unless the grantee voluntarily agrees to quitclaim the property back to the grantor, reversing the effect of the deed will be difficult. Once you deliver a quitclaim deed, you’ve relinquished your rights to the property, and without the grantee’s cooperation in returning it to you, the only way to reverse the deed is by a lawsuit. You will have to prove to a court that you signed and delivered the deed as the result of fraud, duress or undue influence on the part of the grantee.
Advantages of a Quitclaim Deed
A quitclaim deed is a deed without guarantees that transfers a piece of property from one person to another. This type of deed can offer tax advantages when transferring property into a family member’s name. The commonly seen advantage of using a quitclaim deed instead of the traditional warranty deed is keeping the property within the family without incurring additional cost.
Identification
The quitclaim deed is used to transfer real estate property from one person’s name to another. The traditional deed, which is called a warranty deed, is used when property passes from one person to another through a sale of the property. This includes many guarantees to the new property owner. In a quitclaim deed, there are no guarantees included. The deed only guarantees the right of ownership to the person who is receiving the quitclaim deed for the property.
Tax Function
One benefit of a quitclaim deed is that most real estate transactions include paying tax for the transfer of the property, which is based on its value. If the property is transferring from one family member to another with no money attached as a sale, the transaction is considered a gift. A person is allowed to claim a gift of up to $13,000 every year before he is expected to pay tax on the gift. The lifetime total for gift tax exemption is $1 million, so if the person has not used this exemption up in gift giving, he can use it on the transfer of the property and be exempt from paying the tax providing the property’s value is less than $1 million.
Effects on Liens
Another advantage of the quitclaim deed is that it transfers only the ownership of the property and it does transfer any leans or mortgages that are on the property. For this reason, the previous owner will still be responsible to pay any money owed on the property, even once his name is no longer on the title. The person receiving the transferred property from the quitclaim is not responsible for any money owed on the property unless she was as a co-owner before the quitclaim, such as in a divorce case. This advantage allows one family member to give a house to another family member without liens attached to the property.
Divorce Function
The quitclaim deed is most commonly used in a divorce where one spouse has been granted the property either through the court or from the generosity of the other spouse. The title of the home goes into the name of the spouse who was granted the property, but the financial obligations that the other spouse originally signed for are still intact. Using the quitclaim, the couple is not taxed on the transfer of the house.
Avoid Probate
A quitclaim deed can be used to avoid probate court proceedings for your heir when you die. One example of how the quitclaim deed could be used to an advantage would be using this when a parent is terminally ill. If the parent used a quitclaim deed to transfer the property to a child, the property would not have to go through probate court when the parent dies. Probate court can be lengthy in time and costly in lawyer fees. A parent’s name must be removed from the quitclaim deed when adding the heir. If the heir’s name is just added to the deed along with the parent, then the property will still need to go through probate court once the parent has passed away.
Transferring Title with a Deed
There are several ways to transfer real estate title. A warranty real estate deed transfer is the most common type of deed used when properly is sold to a third party in a typical real estate transaction. A warranty deed promises that the person transferring the property has good title to it and the right to sell it. It includes protections for the buyer, such as compensation if there is anyone else who holds superior title to the property. This type of deed promises that there are no liens on the property such as a mortgage, tax lien, or creditor’s liens. When a warranty deed is executed, a title search (a check of past deeds and liens for the property) is conducted to verify the seller has good title. Title insurance is usually purchased as part of the sale to protect the new owner if there is a problem. Warranty deeds are always filed with the county after they are executed.
Do You Need a Quitclaim Deed?
Quitclaim deeds are most commonly used when property is transferred without a traditional sale. Examples include when property is transferred between family members (such as parents transferring a home to their children), between married spouses (after marriage when one spouse wants to add the other to the title of his or her separate property), between divorcing spouses (when one spouse will keep the home), or when property is being transferred into a living trust. The deed transfer is done simply and there is no title search or title insurance used. It is fast and easy. Quitclaim deeds are not used for real estate sales, because the new owner receives no guarantees about the title and how valid it is. A quitclaim deed is also used to clear up title to property, if there is an issue with someone else possibly having an ownership right in the property, he or she can be asked to sign a quitclaim to make sure the new owner has complete title.
Creating a Quitclaim Deed
To transfer title by quitclaim, a quitclaim deed form must be in writing to be valid. This legal document includes a legal description of the property that is being deeded, the county it is located in, date of transfer, and the names of the grantor (person transferring the property) and grantee (person receiving the property). If a price has been paid for the transfer, that amount is included. The grantor signs the document and this signature is generally notarized. Witnesses may be required depending on the state. In some states the grantee also signs the deed. It is common to file the deed with the county clerk in the county where the property is located, but in some states this is not required. Quitclaim deeds are a fast and easy way to move property among family members or to place real estate into a trust. They are not a method to use when selling real estate.
Quitclaim Vs Warranty Deed
A quitclaim deed may work just fine if the grantor truly has the legal rights to a property and there are no liens or problems to be aware of. For the most part, quitclaim deeds are used in safer situations where there’s little question about the ownership interest in a property. For example, quitclaim deeds are often used when someone is transferring ownership interest of a property they own to a limited liability company or trust they also control. Quitclaim deeds can be used when someone is transferring ownership of real estate to family members. For instance, maybe a couple is getting married and one spouse wants to add the other to the deed as a result. In the event of divorce, one spouse can quitclaim their interest in the property to the other spouse as well. Warranty deeds are the safer option when you’re buying a property. As a seller, you should also expect most buyers to request this option.
Rights
Quit claim deeds give rights to property; however, the rights that are conveyed may be worthless. One person gives up whatever rights he has to another. The quit claim deed does not guarantee that the person giving up the right had any rights in the first place. No warranty exists that states the person is signing over a clear title. A more effective method uses a warranty or grants deed, which conveys the property and warrants that the grantor has a right to the property and it is free and clear of any other mortgages and liens.
Liens
When property is conveyed to another through a quit claim deed, all the encumbrances attached to the property remain. If the property has liens against it, the person to whom the property was conveyed is still responsible to pay off those liens.
Quit claim deeds may remove your name from the property’s title but it will not remove you from other responsibilities that come along with the property. If your name is also on the mortgage for the property, you must still make the mortgage payments. You are only relieved of this responsibility when the mortgage is refinanced and your name is removed.
If you receive property as a gift or inheritance through a quit claim deed, certain tax issues may arise. Property owners must pay property taxes levied against property by most counties. The tax is based on the assessed value of the property. When you receive property through a quit claim deed, you are responsible for all the property taxes and the person that conveyed the property to you is no longer liable. Terms Used In Utah Code 57-1-13. Deed: The legal instrument used to transfer title in real property from one person to another and Land.
Utah Real Estate Lawyer
When you need legal help with Utah Code 57-1-13, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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