I took a call from a lady who has called several times over the past two years for help on various things. Today she was asking about a quitclaim deed. Some call this mistakenly a “quick claim” deed because they think it is quick. Actually, it is a “quitclaim” or “quit-claim” deed because the grantor is quitting their claim to the property. They are merely relinquishing any right or interest they may have in favor of the other owner.
In one sense, no transfer occurs in a quitclaim deed and so, it can only be used when the other party has an interest already. My caller, though, wanted her soon to be ex-husband to give his interest to their daughter. I had to explain that this would not work for a quitclaim deed because an actual transfer was occurring. This meant likely transfer taxes would be involved and a different kind of ownership. Instead of joint ownership with the remainder in fee simple to the survivor – the typical husband and wife ownership – it would be a tenancy in common.
Joint ownership, if it were to be imagined, means both parties own 100% of the property concurrently and it would take both parties to sell or transfer the property. Tenancy in common, in contrast, allots a percentage of ownership to each party and each party can convey their percentage of interest or even a portion thereof to another party or parties.
Despite the implication made by my title, there is no “good” versus “bad” ownership type here. I just thought the title was catchy. However, there are implications and it is important for family law practitioners handling divorce cases to have a rudimentary understanding of real property laws and issues.
What the caller wanted to be done could be done by a different deed; but not with a quitclaim deed. Furthermore, such a transfer would technically trigger a default of the mortgage allowing the lender, if they so chose, to foreclose. The likelihood of this actually happening is an entirely different matter. If it were me personally doing this, I would not be terribly concerned about this eventuality. The transfer would, of course, be subject to the mortgage.