Louisiana residents are probably aware that deeds transfer ownership of real estate in the same way motor vehicle titles transfer ownership of cars, but they may not know that not all deeds are the same. Warranty deeds are usually used to transfer ownership of homes and land, but quitclaim deeds are another option. Quitclaim deeds are also known as non-warranty deeds, and the parties involved are called the grantor and grantee. The grantor is the party that transfers ownership of a piece of real estate, and the grantee is the party that receives ownership.
Warranty deeds and quitclaim deeds both assure real estate buyers that the grantor has the right to sell the property in question. The difference between the two types of documents is the level of assurance they provide buyers and lenders. Warranty deeds guarantee that the property is unencumbered, or they disclose any liens or mortgages. Quitclaim deeds provide no such assurance, and the grantor may not even own the property. This is why quitclaim deeds are most often used in real estate transactions between family members.
When quitclaim deeds are used
Quitclaim deeds are used in real estate transactions when title encumbrances not a priority. When they are used to transfer ownership, interested parties like banks and lienholders still have claims on the property and can pursue the new owners for payment. Quitclaim deeds are most commonly used to:
• Add a spouse’s name to a property title after a marriage
• Remove a former spouse’s name from a property title after a divorce
• Pass property to children or other relatives
• Transfer ownership of a property from an individual to a business
• Pass property from one party to another under the provisions of a last will and testament
Speed and convenience
Transferring property with quitclaim deeds speeds up and simplifies real estate transactions, but it does not provide buyers with any assurance that the property is free of encumbrances. This is why quitclaim deeds are most often used to complete straightforward deals between family members.