What to Know About Quitclaim Deeds in Georgia

In Georgia, typically a seller transfers a deed to a property to someone else by warranty deed, limited warranty deed, or quitclaim deeds.

The usual type of deed involved in a residential property transfer transaction is called a warranty deed. With this deed, the person transferring the property makes an explicit assurance that the title to the property is free of all defects. In the event they transfer a property that has encumbrances or imperfect title, they may be liable in a lawsuit. A limited warranty deed is similar to a warranty deed except that it warranties against some, but not all, title defects. Limited warranty deeds are more commonly used in commercial transactions.

In certain circumstances, another kind of deed – a quitclaim deed – could be used to transfer a property. A quitclaim deed is just as valid as a warranty deed; however, the grantor is only transferring their interest in the property. They are expressly disclaiming any assurances about the title to the property, and they cannot be sued for transferring a clouded or imperfect title.

Quitclaim Deeds Are Not for Common Real Estate Transactions

A quitclaim deed is not used in the typical real estate transaction. When two arm’s-length parties are transferring real estate, they generally use a warranty deed. A typical purchaser would have no interest in acquiring a property through a quitclaim deed because it would leave them with the risk of not owning what they think they should, and not having much if any, legal recourse for it. Deed fraud has been a problem for practically as long as there have been real estate deeds. Scammers have been known to use quitclaim deeds to protect themselves from criminal prosecution and civil lawsuits.

Although a buyer who received a quitclaim deed may try to sue for fraud, they could end up owning nothing. Then, they would have wasted their money. Quitclaim deeds do nothing to affect a mortgage, so a buyer could still be on the hook to pay the mortgage for a property transferred through a quitclaim deed even if they do not fully own the property.

Quitclaim Deeds Transfer Whatever Interest the Owner Has

A quitclaim deed is only as good as the title it is transferring. A quitclaim deed only provides notice of the transfer to the public; it does nothing to guarantee ownership. In other words, it is a record as opposed to an instrument that grants a person legal rights. Grantors may try to use quitclaim deeds to protect themselves from any liability in connection with a transfer; however, the typical purchaser should not allow that under any circumstances. Because of the lack of protection, it is virtually unheard of to have a quitclaim deed in any transaction in which money changes hands.

This is not to say that quitclaim deeds never serve a legitimate purpose. There are certain circumstances under which they are helpful and can be the basis for mutually beneficial real estate transactions.

When Quitclaim Deeds Should Be Used

In most cases of real estate transactions involving quitclaim deeds, the two parties to the transaction already know each other and have a preexisting relationship. The most common type of property transfer that could benefit from a quitclaim deed is one in which family members are transferring property to each other.

Some intra-family transfers that may rely upon a quitclaim deed:

  • Parents transferring property to children
  • Spouses wanting to add the other spouse to their property after they get married
  • Transfers of property pursuant to a will
  • Transfers of property between divorcing spouses when one spouse wants to eliminate the other’s interest in the property pursuant to a marital settlement agreement or a court order

Quitclaim deeds can also be used to effect other types of transfers:

  • People will often move their property and title it in the name of a trust, doing so through a quitclaim deed
  • Property owners may legally benefit by moving their real estate into a limited liability company, and they must use a deed—usually a quitclaim deed—to transfer it

When a person receives a quitclaim deed, they take it on an as-is basis. Whatever ownership interests the prior owner had been what they convey to the subsequent owner. If there was a lien or other encumbrance on the property, it would remain with the land.

If a buyer does not already know a seller, they should never accept a quitclaim deed. It would be akin to trusting a stranger with hundreds of thousands or even millions of dollars.

Quitclaim Deeds Are Often Used to Remove a Cloud on Title

Quitclaim deeds may also be used to cure defects in the title. Without it, there may be a break in the chain of title. For example, parties may execute a quitclaim deed when they need to fix the following issues:

  • The wording on the previous title was incorrect or did not comply with the law
  • The name on the previous deed was incorrect
  • Some of the real estate documents were not properly recorded
  • There was a missing signature on the deed
  • The owner’s name changed (most commonly through a change in marital status)

How Quitclaim Deeds Are Executed

In reality, quitclaim deeds are easy to execute. There are only a few steps that are required:

  • The two parties would fill out a deed that includes certain basic information about the parties, properties, and transaction
  • Both parties would sign the deed and have it notarized
  • The quitclaim deed is then filed with the local county clerk’s office

Although quitclaim deeds are easy to execute, you should check with relevant stakeholders before you use one to transfer property. For example, a mortgage may contain a due-on-sale clause that could be triggered by a quitclaim deed. This type of deed may also impact title insurance. Whenever you are contemplating a transfer of real estate that involves a quitclaim deed or other quiet title actions, you should consult with an experienced real estate lawyer for legal advice concerning whether you should move forward with the transaction.