Transferring House Ownership After a Divorce

One common way to transfer house ownership is with a quitclaim deed, a legal instrument by which the owner of a piece of real property, called the grantor, transfers any interest to a recipient, called the grantee. The owner/grantor terminates (“quits”) any claim to the property and transfers the claim to the recipient/grantee.

The vacating spouse uses the quitclaim deed to “quit,” or give up, all “claims” to, rights in, and ownership of, the marital home. In exchange, the spouse who retains ownership pays “valuable consideration” — money, or an item with monetary value — to the spouse filing the quitclaim. In a divorce, one spouse terminates any interest in the jointly owned marital home, thereby grants the receiving spouse full rights to the property.

For example, when a wife acquires the marital home in a divorce settlement, the husband executes a quitclaim deed eliminating his interest in the property and transferring full claim to the wife quickly and inexpensively.

A quitclaim deed contains no title covenant and offers the grantee no warranty as to the status of the property title. The grantee is entitled only to whatever interest the grantor actually possesses at the time the transfer occurs. In this the grantor does not guarantee that he or she actually owns any interest the property, or if he or she does own an interest, that the title is free and clear. It is therefore possible for a grantee to receive no actual interest, and – because a quitclaim deed offers no warranty – have no legal recourse to recover any losses.

Because of this lack of warranty, quitclaim deeds are most often used to transfer property between family members, as gifts, placing personal property into a business entity (and vice-versa) or in other special or unique circumstances. Quitclaim deeds are rarely used to transfer property from seller to buyer in a traditional property sale; in most cases, the grantor and grantee have an existing relationship, or the grantor and grantee are the same person. Further, if the grantor should acquire the property at a later date, the grantee is not entitled to take possession, because the grantee can only receive the interest the grantor held at the time the transfer occurred. By comparison, other deeds often used for real estate sales (called grant deeds or warranty deeds, depending on the jurisdiction) contain warranties from the grantor to the grantee that the title is clear and/or that the grantor has not placed any encumbrance against the title.

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