Take Control Blog

What Is a Quit Claim Deed?

In many divorces where real estate is involved in the final settlement, the Marital Settlement Agreement (MSA) often calls for the issuance of a Quit Claim Deed (QCD) by one party to the other.  But what is a QCD and what else should be considered?

A QCD is a document by which a person transfers an interest in a house, mobile home (that has been permanently placed) or any other form of real estate to another person.  By giving such a deed, the person is simply transferring the interest in the property and is making no claim as to the interest another person may have in the property.

It’s important to note that a QCD does not guarantee that a property is properly titled.  Furthermore, if there is a loan on the property, the QCD does not release the issuer from the liability associated with the bank note.  For the person receiving the QCD, it does not mean that the property was “given” to free and clear.

For example, if as a condition for executing the QCD the ex-spouse demands to be removed from the loan note (as should be the case), the other party has to quality for a new loan on the property or pay the ex-spouse for their interest in the property’s equity.  This is a particular issue after a divorce, as in many cases the individual receiving the property cannot qualify for a loan based on a single income and credit rating.

Moral of the story: after or during the divorce process, all property titles and loans must be examined carefully.  Simple reports such as an Owner’s and Encumbrance Report or Attorney’s Opinion of Title are not expensive and clarify any issues with regards to real estate debt, title, easements, covenants, restrictions.  Having a real estate attorney or title company looking out for your interests is paramount.