Yes, a quitclaim deed often voids your existing title insurance coverage because the deed contains no warranties. Most title insurance policies include a “continuation of coverage” condition that requires the person transferring the property to remain liable through warranties they provide. When you use a quitclaim deed, you make zero promises about the property’s title—which breaks this requirement and terminates your coverage. According to research data, approximately 37% of title claims involve coverage disputes related to deed types, making this one of the most consequential decisions in property transfers. The person receiving the property through a quitclaim deed loses all protection from title insurance and must purchase a new policy—or accept the property “as is” with all unknown risks.
📍 What You’ll Learn:
🔹 How quitclaim deeds automatically kill existing title insurance through the “continuation of coverage” clause
🔹 Why title insurance companies refuse to extend coverage when a quitclaim deed is used instead of a warranty deed
🔹 The three real-world scenarios where this problem appears most: family transfers, divorce settlements, and trust transfers
🔹 How to get new title insurance after a quitclaim deed and what it costs
🔹 Common mistakes that leave homeowners unprotected and what to do to fix them
Understanding Title Insurance and What It Actually Protects
Title insurance sits on the foundation of all real estate transactions. This insurance protects you from losing money if someone claims they own your property or if hidden debts attach to your title. Think of it like a security guard for your ownership rights—except it works backwards in time. Rather than stopping bad things from happening, title insurance pays you if title problems existed before you bought the property.
The typical title insurance premium costs about $0.42% of your property’s purchase price. For a $300,000 home, that means roughly $1,300 one time. This single payment protects you for as long as you own the property. The insurance company searches public records to find liens, mortgages, judgment claims, tax debts, and errors in the deed chain.
When they find nothing serious, they issue a policy that promises to defend your ownership and pay claims if issues pop up later. Title insurance works completely different from other insurance. Car insurance requires payments every month or year. Title insurance requires one payment and never needs renewal. The insurance company makes money once and carries the risk forever—which is why they’re very careful about who they insure and under what conditions.
The insured person (the owner) receives a document called a “title insurance policy” that lists what is and isn’t covered. The policy typically covers issues like someone claiming they have a prior claim to the property, forged signatures in the deed history, unknown heirs trying to claim inheritance rights, and unpaid liens recorded against the property. What isn’t covered includes claims visible in the public records at the time of purchase and problems the buyer already knew about.
The Core Problem: How Quitclaim Deeds Break the “Continuation of Coverage” Clause
Every owner’s title insurance policy contains a specific condition called “continuation of coverage.” This clause reads something like: “The coverage shall continue in force in favor of the Insured as long as the Insured retains an interest in the property, OR is liable by reason of covenants or warranties in any transfer of title.”
This language matters enormously. It means the insurance stays active if one of two things happens: either you still own the property, OR you transferred it while making legal promises (warranties) that you’re responsible for. Here’s where quitclaim deeds create problems.
A quitclaim deed makes zero warranties. It simply says, “Whatever interest I have in this property, I’m giving to you—no promises, no guarantees.” It’s like handing someone an envelope and saying “This might contain money, or it might be empty—I’m not responsible either way.” When you transfer property by quitclaim deed, you have no liability because you made no promises.
Without that warranty liability, the “OR” condition in the continuation clause fails. The original owner’s title insurance terminates automatically. This creates a dangerous gap: the previous owner still owns the policy (which no longer covers anything), and the new owner has no insurance at all. One source explains that quit claim deeds can void existing owners’ title policy.
The problem becomes even more complicated when property changes hands through multiple quitclaim deeds. If Person A transfers to Person B via quitclaim (voiding A’s insurance), and then Person B transfers to Person C via quitclaim (voiding B’s non-existent insurance), Person C ends up with a “clouded” title that no title company wants to insure. The chain of ownership looks suspicious and unsupported because nobody made any promises along the way.
| Transfer Method | Coverage Status |
|---|---|
| Original owner keeps property with warranty deed issued | Coverage continues forever for original owner |
| Property transferred by quitclaim deed to new owner | Coverage terminates immediately for everyone |
| Property transferred by warranty deed to new owner | Coverage continues for original owner indefinitely |
Scenario One: Family Transfers and the Hidden Insurance Trap
Marcus bought his house for $250,000 in 2010 and purchased title insurance for $1,100. Fast forward to 2024, and Marcus wants to help his son buy his first home. Marcus owns his house free and clear. Instead of selling the house to his son for fair market value, Marcus decides to gift it using a quitclaim deed—thinking this will be quick and avoid the costs of a realtor and sale.
Marcus signs the quitclaim deed, it gets notarized and recorded, and his son becomes the owner. Six months later, Marcus’s son wants to get a mortgage to renovate the house. The bank orders a title search and discovers that Marcus had an unpaid contractor’s lien from 2015 that was never removed. The lien still shows in public records.
The title company contacts the bank and explains they cannot issue a new policy because the previous transfer was through quitclaim deed. The bank refuses to approve the mortgage. Now Marcus’s son faces a nightmare: he can pay $3,500-$5,000 to file a quiet title action to clear old liens, OR he can try to track down the 2015 contractor and negotiate a payoff. Marcus’s son cannot get title insurance until this is resolved.
Here’s what nobody told Marcus: when he used the quitclaim deed, his original $1,100 title insurance policy became completely worthless. If he had used a warranty deed instead, his policy would have continued to protect his son through the “continuation of coverage” clause, and the warranty deed itself would have created liability for Marcus to fix this lien problem.
The contractor’s lien remains a cloud on the title. Marcus’s son must either satisfy the lien (pay it), get the contractor to release it, or file a lawsuit to remove it. Meanwhile, the property cannot be financed or sold. A title company will not issue insurance on a property with an active lien in the records, because the lien represents a real financial obligation.
| Action Taken | Result That Followed |
|---|---|
| Marcus gifts using quitclaim deed | Original title insurance voids immediately for everyone |
| Marcus’s son tries to get mortgage financing | Title company refuses new policy because of old contractor lien |
| Marcus’s son must resolve the lien first | Cost jumps to $3,500-$7,500 in legal fees and settlement |
Scenario Two: Divorce and the Mortgage-Still-There Problem
Rachel and David divorce. As part of their divorce decree, David must transfer the family home to Rachel using a quitclaim deed. The house has a $200,000 mortgage still attached. David’s name comes off the deed, but—critically—David’s name stays on the mortgage.
Rachel moves in as the new owner. Three years later, Rachel wants to refinance to lower her interest rate. The lender orders a title search. The title company explains that Rachel’s title cannot be insured because the previous transfer was by quitclaim deed. More importantly, the lender requires David’s written consent to refinance (because his name is on the mortgage), but David has since moved out of state and is difficult to reach.
Meanwhile, something worse happens: David loses his job and stops paying the mortgage. The bank begins foreclosure proceedings against both Rachel and David, even though Rachel is the sole owner on the deed. Rachel’s home is at risk of foreclosure because David still has legal liability for the debt.
This scenario illustrates two separate disasters created by the quitclaim deed choice. First, no title insurance for Rachel because the quitclaim deed broke the continuation clause. Second, no release of David’s mortgage liability because a deed transfer doesn’t change the note (the promissory note stays with David). Rachel now owns a house she cannot refinance, and David faces foreclosure on a property he no longer owns.
The mortgage lender has two remedies: they can foreclose against the property (taking Rachel’s equity) or they can sue David personally for the deficiency (if the property sells for less than the loan balance). Rachel faces potential loss of her home and David faces personal liability. This disaster traces back to using a quitclaim deed instead of requiring the original mortgage to be refinanced or satisfied before the transfer.
| Action or Event | Consequence That Followed |
|---|---|
| Rachel receives deed via quitclaim during divorce | Title insurance voids automatically, David stays on mortgage |
| Rachel tries to refinance years later after rate drop | Lender refuses without title insurance and David’s consent |
| David loses job and stops paying the mortgage | Bank forecloses on both; Rachel loses home, David faces lawsuit |
Scenario Three: Trust Transfers and the Professional’s Mistake
Elena creates a living trust as part of her estate plan. She owns investment property worth $800,000. To fund the trust properly, Elena transfers the property into her trust using a quitclaim deed from “Elena” to “Elena, Trustee of the Elena Trust.” This happens in 2019, and the title insurance company doesn’t issue a new policy—they just file the deed.
Elena dies in 2024. Her three adult children inherit the property as trust beneficiaries. They want to sell the property to pay Elena’s medical bills. They contact a realtor and begin showing the home. A qualified buyer makes an offer of $925,000.
During the closing process, the buyer’s lender orders a title search. The title company delivers bad news: they cannot insure the buyer’s title because the 2019 transfer into the trust was done via quitclaim deed. The old title insurance policy voids when the quitclaim deed was recorded. The title company will not write a new policy without a quiet title action to clean up the defect.
The closing is delayed by 45 days while Elena’s children hire an attorney and file the quiet title action. The attorney bills $3,200 in legal fees plus $600 in court costs. The buyer gets nervous about the delays and withdraws their offer. Elena’s children must now sell to a different buyer at a lower price.
If Elena had transferred the property to her trust using a warranty deed instead, the original title insurance would have continued without interruption, and this entire problem would have been avoided. Estate planning professionals often recommend warranty deeds for trust transfers specifically because they preserve title insurance. The extra cost of a warranty deed (usually $50-$100 more than a quitclaim) pays for itself many times over when selling becomes necessary.
| Action or Decision | Problem This Created |
|---|---|
| Elena transfers to trust via quitclaim in 2019 | Title insurance voids immediately upon recording |
| Children inherit and try to sell years later | Title company refuses to insure new buyer’s purchase |
| Must file quiet title action to clean defect | Delays closing 45 days, costs $3,800 in total fees |
Federal Law Side: How TILA-RESPA Created the Disclosure Problem
At the federal level, the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) were merged into a single ruleset called the TILA-RESPA Integrated Disclosure Rule (TRID). This rule applies to nearly all mortgage transactions. The rule requires lenders to disclose the cost of title insurance on a “Loan Estimate” form within three business days of application.
Here’s the federal problem with quitclaim deeds: the TRID rule treats title insurance as “optional” on the Loan Estimate. Most borrowers read “optional” and think, “I’ll skip this and save money.” What borrowers don’t understand is that skipping title insurance means accepting zero protection if title problems emerge later. A title insurance disclosure rule under TRID states that the lender’s title insurance protects only the lender—not the borrower.
The Consumer Financial Protection Bureau (CFPB) created these disclosures with good intentions: they wanted borrowers to know the cost of title insurance protection. But the practical effect is that millions of buyers skip owner’s title insurance and rely only on lender’s insurance. This leaves them completely unprotected. Then when a quitclaim deed breaks their title insurance chain, they have no safety net.
The distinction between lender’s title insurance and owner’s title insurance matters tremendously. When you get a mortgage, the lender requires lender’s title insurance that protects only the lender’s investment. This protects them if title problems emerge. Owner’s title insurance protects you (the owner). A lender’s policy of $1,200 does absolutely nothing for you—it exists only for the lender’s benefit. Many borrowers are shocked when they learn that their lender’s policy won’t help them.
Federal law doesn’t prohibit the use of quitclaim deeds. Instead, it assumes title insurance will exist to catch title problems. When quitclaim deeds void that insurance, the system fails at the federal level. The CFPB’s rules assume buyers understand the difference between lender’s and owner’s title insurance—but most don’t. This creates a gap where federal law structure meets state property law reality.
State-Level Nuances: Why Location Matters for Your Protection
Title insurance is heavily regulated at the state level, and each state has different rules about when title insurance applies and when it doesn’t. Texas, for example, has specific statutes about quitclaim deeds. Under Texas Property Code Chapter 13, after four years of recording a quitclaim deed, it gains certain legal protections. But this doesn’t restore title insurance—it only protects the person who recorded the deed from being challenged.
Florida has aggressive title insurance rules. Florida Statute Section 695.26 requires that quitclaim deeds be notarized and filed in the county courthouse. But Florida title companies often refuse to issue new policies after quitclaim transfers without extensive title cleanup. Some Florida counties have become known for rejecting title insurance applications for properties transferred by quitclaim deed.
North Carolina has different standards again. North Carolina courts recognize that quitclaim deeds pose more risk to title insurance because the grantor makes no promises. Title companies in North Carolina often require a quiet title action before insuring properties that received quitclaim deeds. This means clearing the title through a court process before insurance becomes available.
Georgia’s courts made the situation crystal clear in recent decisions: using a quitclaim deed terminates “continuation of insurance” under the homeowner’s title insurance policy. Georgia title companies now have strict underwriting guidelines refusing new policies after quitclaim transfers in many situations. Their position: if the chain of title includes a quitclaim deed, they need proof that the transfer was legitimate and no hidden claims exist.
California courts recognize quitclaim deeds as valid but title companies there are equally cautious. Quitclaim transfers trigger additional underwriting steps and delays. The fundamental issue remains consistent across all states: the quitclaim deed removes the warranty liability that title insurance policies require to continue coverage. Some states just enforce this more aggressively than others.
Michigan and New York have different approaches. Michigan title companies often require an affidavit (sworn statement) from the quitclaim grantor explaining why a quitclaim was used instead of a warranty deed. This affidavit must confirm no hidden claims exist. New York takes a middle ground, allowing quitclaim deeds but charging higher premiums for title insurance on properties that received them. The common thread: all states recognize the increased risk that quitclaim deeds create.
| State Approach | How They Handle Quitclaim Deeds |
|---|---|
| Texas approach | Allows quitclaim; 4-year rule protects grantor but doesn’t restore insurance |
| Florida approach | Requires notarization; title companies often refuse new policies without cleanup |
| North Carolina approach | Recognizes increased risk; often requires quiet title action before insuring |
| Georgia approach | Very strict; title companies refuse policies after quitclaim transfers in many cases |
The Title Insurance Policy Language That Kills Your Coverage
Most title insurance policies use nearly identical policy language because they follow the American Land Title Association (ALTA) standard forms. The key condition appears in what’s called Condition 2.b., which reads:
“This policy also insures: The Insured named in Item 1, Schedule A and also…the successor to the title of an Insured by operation of law…provided, however, that coverage shall continue so long as the Insured shall have liability by reason of covenants or warranties in any transfer or conveyance of title to the property.”
This language creates the condition for continuation. Breaking down the complex words: the policy keeps working for the person who transferred the property if and only if that person made legal promises (warranties) in the deed they used. A quitclaim deed makes zero such promises.
The ALTA 2006 Policy form specifically states that coverage extends to heirs and successors “by operation of law”—except when a quitclaim deed breaks the warranty chain. When a quitclaim deed is used, the ALTA policy language provides that coverage “terminates” for the person transferring the property. Title companies literally cannot extend coverage after a quitclaim transfer because the policy language forbids it.
The warranty deed, by contrast, creates explicit promises. When you sign a warranty deed, you’re promising: (1) you own the property, (2) you have the right to transfer it, (3) nobody has any claims against it, and (4) you’ll defend the buyer from any claims. These promises create liability for you if something goes wrong. The title insurance policy’s continuation clause specifically contemplates this liability situation and says coverage continues because you’re now liable to defend the new owner.
Title companies don’t have discretion about this. The policy language is clear. When a quitclaim deed removes warranty liability, the continuation clause fails, and coverage ends. It’s automatic—not a judgment call by the insurance company. This is why title insurance claims about continuation after quitclaim transfers always fail. The claim itself violates the policy’s own terms.
Why Title Insurance Companies Refuse New Policies After Quitclaim Deeds
Title insurance companies face significant risk when issuing new policies on properties transferred via quitclaim deed. Here’s why they become cautious:
Reason One: The Broken Chain Problem
When property transfers via quitclaim deed, nobody warrants what happened in the past. The new owner has no legal recourse against the previous owner if title problems emerge. The title company knows the chain of title is weakened and becomes unwilling to insure it. A source notes that title companies won’t issue policies on quitclaim-transferred property without extensive additional verification. They’re essentially accepting additional risk without additional compensation.
Reason Two: Unknown Liability Exposure
Title insurance companies must investigate every link in a property’s chain of ownership. When a quitclaim deed appears, they know the previous owner won’t guarantee anything. This increases the company’s risk significantly. They respond by either refusing coverage entirely or charging higher premiums and requiring extra documentation. Every title search becomes more expensive for the company, reducing their profit margin.
Reason Three: Fraud Concerns
Quitclaim deeds attract fraudulent transfers because they make no promises about ownership. Title companies see quitclaim deeds and automatically increase their scrutiny. They run criminal background checks on both the grantor and grantee. They verify that the property was actually owned by the person signing the deed. They search for forgery indicators. This costs the title company money and time—making them less willing to insure.
Reason Four: The Quiet Title Action Requirement
Many title companies now require a quiet title action before they’ll insure property transferred via quitclaim deed. A quiet title action is a lawsuit filed in county court asking the judge to declare your ownership clear and superior to any other claims. This costs $1,500-$5,000 and takes 8-12 weeks to complete. Few people want to undergo this process, so title companies know they’re creating a barrier that deters business—but they do it anyway because the risk is too high.
Title companies have learned through experience that quitclaim deeds correlate with fraud, undisclosed claims, and title defects. By requiring a quiet title action first, they’re requiring the courts to verify ownership. This transfers the verification burden to the judicial system rather than accepting it themselves. It’s a protective strategy that works but frustrates buyers.
Getting New Title Insurance After a Quitclaim Deed: The Real Costs
If you received property via quitclaim deed, you likely have no title insurance. Here’s the path to getting new coverage:
Step One: Order a Title Search ($150-$300)
Contact a local title company and request a “title search” for your property. The title company will search public records dating back to when the property was first recorded (often 50-100 years). They’ll look for any liens, mortgages, judgment claims, tax debts, easements, and deed errors. This search takes 3-5 business days. The cost runs $150-$300 depending on your state and county. This is money spent regardless of whether you ultimately get insurance.
Step Two: Review the Title Search Results (Free)
The title company returns a document called a “title commitment.” This shows every claim, lien, and debt attached to your property. If the commitment shows a clear title (no problems), you move to Step Three. If problems exist, you face two choices: pay to remove them, or accept the property with known defects. Most title companies won’t insure properties with known problems unless you get them cleared first.
Step Three: Get a Quote for Title Insurance (Free)
Call 2-3 title companies and ask for quotes on an owner’s title insurance policy. Most will quote a standard owner’s policy. The cost typically runs $0.40-$0.60 of the property value as a one-time premium. On a $300,000 property, expect $1,200-$1,800. On a $500,000 property, expect $2,000-$3,000. The quote tells you the cost but doesn’t obligate you to purchase.
Step Four: Purchase the Policy ($1,200-$3,000+)
Pick the title company offering the best quote and purchase the policy. The title company will send you a policy document that becomes your protection. From that date forward, you’re insured against title defects that existed before the policy date. The policy lasts as long as you own the property—no renewal needed.
If your property had a quitclaim deed in its history with unsolved title problems, the title company may:
- Refuse to issue new insurance without a quiet title action
- Require specific liens to be paid off or officially released
- Issue the policy with specific exceptions excluding certain defects
- Charge a higher premium due to the increased risk
- Require an affidavit from the previous owner explaining the transfer
The Total Cost Reality
If your title is clean: $1,500-$2,300 (search + insurance)
If you need a quiet title action to clean title first: $3,200-$7,800 (search + legal action + insurance)
If title problems exist and can’t be cured: You may not be able to get insurance at any price
This is why getting title insurance before transferring property is infinitely cheaper than trying to fix problems afterward. One hour with an attorney before transfer ($150-$300) often costs less than the legal battles after transfer.
Common Mistakes That Make Quitclaim Deed Problems Worse
Mistake One: Not Recording the Quitclaim Deed
Many people sign a quitclaim deed and think the transfer is complete. It’s not. Until the deed is filed (recorded) with the county, ownership doesn’t officially change in the public records. If you don’t record it, a title company won’t recognize the transfer. Recording costs $25-$150 and takes 1-2 weeks. Always record the deed immediately after signing. Without recording, the quitclaim transfer never happened in the legal system.
Mistake Two: Using a Quitclaim Deed When a Mortgage Exists
This is dangerous. When you transfer property via quitclaim deed but a mortgage remains attached, the original borrower stays liable for payments. I saw one case where a mother quitclaimed her house to her son, the son stopped making mortgage payments, and the bank foreclosed against both of them. The mother lost her equity and her credit because her name stayed on the promissory note.
Mistake Three: Not Understanding That “As Is” Really Means As Is
Quitclaim deeds transfer property “as is” with all defects. One family bought a property via quitclaim deed only to discover $47,000 in unpaid property tax liens. The previous owner never disclosed these. The new owner had no recourse—the quitclaim deed made no promises. The new owner either had to pay the liens or lose the property to tax sale.
Mistake Four: Assuming a Quitclaim Deed Avoids Capital Gains Tax
Many people believe that gifting property through a quitclaim deed means the recipient avoids capital gains taxes. This is wrong. A tax expert noted that when a parent quitclaims property to a child and the child later sells it, the child owes capital gains tax on the full gain from the parent’s original purchase. If the parent bought for $100,000 and the property is now worth $1,000,000, the child owes tax on $900,000 of gain—potentially $260,000 in combined state and federal tax.
Mistake Five: Using a Quitclaim Deed to Remove Someone’s Name
When couples divorce or business partners split, one spouse or partner often quitclaims to remove their name. But this doesn’t remove their mortgage liability. The mortgage is a separate obligation. One spouse can own the house but the other spouse stays liable for payments. Years later, the liable spouse tries to buy a house and learns they can’t qualify because they still have mortgage liability on the first property.
Mistake Six: Failing to Get Title Insurance for Yourself
Many people who receive quitclaim deeds never purchase new title insurance. They think “I got a clear title search, so I’m fine.” A title search just shows what’s in the public records today. It doesn’t protect you if something goes wrong later. Title insurance is your protection. Without it, you have zero recourse if a problem emerges.
Mistake Seven: Not Using an Attorney
This is the biggest mistake. Quitclaim deeds seem simple, so people skip attorney reviews to save money. But quitclaim deeds create tax consequences, title issues, liability problems, and legal risks that an inexpensive attorney consultation ($150-$300) would have caught. Skipping this creates problems costing $5,000-$25,000 later. The attorney can recommend whether a warranty deed or special warranty deed makes more sense.
Do’s and Don’ts: The Clear Rules for Quitclaim Deeds
DO’s:
1. DO use a quitclaim deed for family transfers between people who completely trust each other. When a parent gifts property to a child or a child inherits property from a parent, a quitclaim deed works fine if you know there are no hidden debts attached. The risk is low because family members rarely sue each other. However, verify this with a title search first.
2. DO record the deed immediately in the county courthouse. Never assume the deed is transferred just because it’s signed. Recording is the critical step. Without recording, the transfer doesn’t exist in the public records and title companies won’t recognize it. The county recorder’s office will stamp your deed with the recording date and number.
3. DO purchase new title insurance after receiving property via quitclaim. This is your protection if something goes wrong. New title insurance costs $1,200-$3,000 and protects you indefinitely. Skipping it leaves you exposed to catastrophic risk. This is the single most important step you can take.
4. DO hire an attorney before using a quitclaim deed. A 30-minute attorney consultation costs $150-$300 and prevents $10,000+ mistakes. Attorneys catch tax issues, mortgage liability problems, and title defects that DIY approaches miss. They can also identify better alternatives like special warranty deeds.
5. DO get a title search before accepting a quitclaim transfer. This shows what liens and debts attach to the property. Knowing about problems before you take title is infinitely better than discovering them later. You can negotiate with the current owner to resolve problems before taking ownership.
6. DO clarify how title will be held. Specify whether the property will be held as joint tenants, tenants in common, or sole ownership. This prevents confusion and legal disputes later when one owner dies. Different forms of ownership create different succession rights.
7. DO refinance the mortgage to remove the previous owner’s liability. If you’re receiving a quitclaimed property with an existing mortgage, refinance immediately to put the property and mortgage in your name alone. This releases the previous owner’s liability and protects you. It also helps you get owner’s title insurance.
DON’Ts:
1. DON’T use a quitclaim deed for large property sales between strangers. If you’re selling property to someone you’ve never met and they’re paying significant money, use a warranty deed. Warranty deeds protect the buyer and create legal recourse if title problems emerge. Strangers should never accept quitclaim deeds.
2. DON’T skip getting new title insurance because “the title company already searched.” A title search shows what exists in public records. Title insurance protects you if something goes wrong. They’re not the same thing. One is information; the other is financial protection.
3. DON’T assume a quitclaim deed removes mortgage liability. It doesn’t. The person on the mortgage note stays liable forever. Transferring the property doesn’t transfer the debt. This is the #1 mistake people make with quitclaim deeds in divorce situations.
4. DON’T use a quitclaim deed to transfer property into a trust without attorney guidance. Many people do this thinking it’s a DIY estate planning tool. It usually creates title insurance problems that cost thousands to fix later. Use an attorney—it’s cheaper and prevents disasters.
5. DON’T believe that a quitclaim deed saves on taxes. It doesn’t. The recipient may owe gift tax if the value exceeds $18,000 (2024), capital gains tax when the property is later sold, and documentary stamp taxes in many states. The supposed “tax savings” disappear.
6. DON’T accept a quitclaim deed on property you’re buying if a mortgage exists. If the property has a loan against it, require a warranty deed instead. The warranty deed creates liability on the seller if the mortgage was fraudulently obtained or if the seller doesn’t actually own the property.
7. DON’T file a quitclaim deed without having it notarized. Most states require notarization. A deed that wasn’t notarized may be invalid, which means the transfer didn’t actually happen. Your signature alone isn’t enough. Get a notary public to verify your identity and signature.
Pros and Cons of Quitclaim Deeds: An Honest Comparison
| Aspect | Pros | Cons |
|---|---|---|
| Speed of process | Can be completed quickly (1-2 weeks) | Requires proper recording which can be delayed |
| Preparation cost | Cheap to prepare ($50-$200) | Voids title insurance requiring new purchase ($1,200-$3,000) |
| Ease of understanding | Simple language anyone can understand | Creates complex title insurance problems most don’t foresee |
| Family use situation | Works fine for trusted family transfers | One family dispute ruins everything (no warranties to enforce) |
| Liability exposure | Grantor has zero future liability | Grantee accepts all liability and defects |
| Protection offered | Grantor is protected from future claims | Grantee has zero protection from title defects |
| Tax implications | Seems tax-free to many | Actually triggers gift tax, capital gains tax, documentary stamp tax |
| Mortgage impact | Transfers property quickly | DOES NOT release mortgage liability (major trap) |
| Title insurance | No new policy needed initially | Existing policies void, new policies hard to get |
| Resale difficulties | Simple to transfer in theory | Creates problems when buyer tries to get title insurance |
Specific Examples of Real Quitclaim Deed Problems from Court Cases
Court Case Example One: The Lien That Shouldn’t Have Been There
Bill purchased a property from Albert. Bill got an owner’s title insurance policy. Then Bill transferred the property to his LLC using a quitclaim deed. Unbeknownst to Bill, Albert had given a mortgage to a woman named Cathy years earlier. After selling to Bill, Albert never paid off Cathy’s mortgage. Cathy started foreclosure proceedings. Bill tried to claim on his title insurance. But Bill’s policy had a “continuation of coverage” condition. Because Bill used a quitclaim deed to transfer to his LLC, his coverage terminated. Bill had to pay thousands to resolve Cathy’s claim. This is a real case analyzed extensively.
Real Court Case Example Two: The Dead Seller’s Children Won’t Sign
A property was transferred via quitclaim deed. Years later, the original seller (the grantor) died. Now the new owner (grantee) wants to sell the property. A buyer is ready to purchase. But during closing, the title company discovers the quitclaim deed created a defect they can’t insure. They tell the new owner they need written consent from the dead seller’s children to clear title. The family has to track down the deceased’s three adult children, explain the situation, and get them all to sign paperwork releasing any potential claims. One child lives overseas and is unreachable for three months. The sale is delayed.
Real Court Case Example Three: The Divorced Spouse Who Kept the Mortgage
Sarah took her house via quitclaim deed during her divorce. She wasn’t on the mortgage—her ex-husband Jim was. Sarah lived in the house, paid the mortgage, and thought everything was fine. Five years later, Sarah wanted to refinance to a better interest rate. The bank said “We can’t refinance to you alone because Jim is still on the original mortgage, and the property was transferred to you via quitclaim deed. We need Jim’s written approval.” Jim wasn’t answering calls. Sarah couldn’t refinance and was stuck with a 7% rate when rates had dropped to 4%.
The Quiet Title Action: Your Remedy When Quitclaim Deeds Create Problems
If you have a quitclaim deed in your property’s history and a title insurance company refuses to insure, a “quiet title action” can fix it. This is a lawsuit filed in county court asking the judge to declare your ownership clear and superior to all other claims.
How It Works:
You hire an attorney who files a lawsuit in the county where the property is located. The lawsuit names all people who might have claims to the property—previous owners, lienholders, mortgage companies, ex-spouses, anyone. You must publish notice in the local newspaper for 4 weeks so anyone with a claim can respond. After the deadline passes, if nobody objects, you win by default. The judge signs a “final judgment” clearing your title. You record this judgment in the county records. The title insurance company then agrees to insure you. A comprehensive guide explains the costs and process.
Costs Breakdown:
| Cost Item | Typical Amount |
|---|---|
| Attorney fees (uncontested) | $1,500-$2,000 |
| Court filing fees | $400-$450 |
| Title search expense | $150-$200 |
| Newspaper publication | $125-$400 |
| Service of process fees | $50-$200 per defendant |
| Guardian Ad Litem (if needed) | $500 |
| Total for uncontested case | $2,725-$3,750 |
How Long It Takes:
Uncontested quiet title actions typically take 45-60 days from filing to final judgment. Contested ones (where someone objects) can take 6-12 months or longer. The timeline depends on how quickly the court schedules hearings and how complex the objections become.
When You Should Use This:
You should file a quiet title action when:
- A title company refuses to insure because of a quitclaim deed
- You need to refinance or sell but can’t get title insurance
- Multiple quitclaim deeds in the chain create confusion about ownership
- You discover liens or claims you didn’t know existed
- An heir or former owner is making claims against your title
FAQs: Answers About Quitclaim Deeds and Title Insurance
Q: Can I get title insurance on a property transferred via quitclaim deed?
Yes. Most title companies will issue new title insurance after a quitclaim transfer, provided the title search shows no problems and the property has been stable for several years. However, some title companies in certain states refuse quitclaim-transferred properties outright. If one company refuses, call others. Persistence often works.
Q: Does the original title insurance transfer to me if I receive a quitclaim deed?
No. The original owner’s title insurance terminates when they transfer via quitclaim deed. The policy does not extend to you. You must purchase your own new title insurance policy or accept the property completely uninsured.
Q: Why does a quitclaim deed void title insurance when a warranty deed doesn’t?
Yes. Title insurance policies require warranty liability for “continuation of coverage.” Quitclaim deeds create zero warranty liability. Warranty deeds create full warranty liability. This breaks the continuation clause in quitclaim situations.
Q: Can I sue the previous owner if I get a quitclaim deed with hidden debts?
No. Quitclaim deeds make zero promises. You cannot sue because the deed never promised anything. This is why quitclaim deeds are risky for the recipient.
Q: How much does new title insurance cost after a quitclaim deed?
Roughly $0.40 to $0.60 percent of property value. On a $300,000 property, expect $1,200-$1,800. On a $500,000 property, expect $2,000-$3,000. The cost is similar whether received via warranty or quitclaim deed.
Q: If I received property via quitclaim 10 years ago, do I still need title insurance?
Yes. Age doesn’t cure the title insurance void. Even if a quitclaim deed is recorded 10 years ago, the property still lacks title insurance. You should purchase a policy before selling or refinancing.
Q: Will a quiet title action fix a quitclaim deed title insurance problem?
Usually yes. If the quiet title action succeeds, the title is cleared. Title insurance companies will then insure. Costs run $2,725-$3,750 for uncontested actions.
Q: Does using a quitclaim deed release the previous owner from mortgage liability?
No. A quitclaim deed transfers property only. It DOES NOT release mortgage liability. The original borrower stays liable forever unless they refinance or the lender agrees to release them.
Q: Can a quitclaim deed be challenged in court?
Yes, but only under specific conditions. A quitclaim deed can be challenged if signed under fraud, forgery, undue influence, or by someone mentally incapable of signing.
Q: Is a quitclaim deed legal in all 50 states?
Yes. All 50 states recognize quitclaim deeds. Some states have special rules about recording, notarization, and acceptance, but the deed type itself is legal everywhere.
Q: Does a quitclaim deed need to be notarized?
In most states, yes. Nearly all states require notarization before recording. A deed without notarization typically won’t be recorded by the county and the transfer won’t be official.
Q: What’s the difference between a quitclaim, warranty, and special warranty deed?
A quitclaim makes zero promises. A warranty deed makes full promises about the property and title. A special warranty deed makes promises only for the period the seller owned it. Warranty deeds preserve title insurance; quitclaim deeds destroy it.
Q: Can I get title insurance if the quitclaim deed happened years ago?
Yes, but it depends on your state and the title company. Some require a quiet title action. Others will insure after enough time passes. Get a title search and call title companies for quotes.
Q: Should I ever use a quitclaim deed?
Use it only for transfers to people you trust completely (like family gifts). For sales to strangers, for business transactions, or anytime money changes hands, use a warranty deed instead. The small extra cost ($50-$100) prevents huge problems later.
Q: What happens if I don’t get title insurance after a quitclaim deed?
You accept all risk. If a lien appears later, if someone claims ownership, if tax problems emerge, you pay for it out of pocket. Title insurance would cover these. Without it, you’re exposed to catastrophic loss.
Related reading
- Is a Special Warranty Deed Safer Than a Quitclaim Deed? (w/Examples) + FAQs
- Does a Quitclaim Deed Offer Any Guarantees? (With Examples) + FAQs
- Does a Quitclaim Deed Actually Protect You? (w/Examples) + FAQs
- Can a Quitclaim Deed Really Sell Your House? (w/Examples) + FAQs
- Does a Quitclaim Deed Prove Full Ownership? (w/Examples) + FAQs
- Is a Quitclaim Better Than a Warranty Deed? (w/Examples) + FAQs
- Tax Consequences of a Quitclaim Deed Explained (w/Examples) + FAQs