A quitclaim deed moves your ownership of property to someone else, but it does NOT guarantee you actually own what you are signing away. Once filed with the county, the deed becomes a public record, and the new owner gets listed on the title. The old owner loses all legal claim to the property, even if the deed never should have been signed in the first place. This simple piece of paper creates serious consequences that many people do not see coming.
Over 2 million property transfers happen each year in the United States, and roughly 15% of those involve quitclaim deeds—meaning about 300,000 people face the exact situation you are about to learn about.
Here’s what you’ll learn in this article:
📋 How a quitclaim deed works and what makes it different from other deeds—plus why those differences matter to your wallet
⚠️ What happens the exact moment your deed gets filed at the county recorder’s office and why you cannot take it back after that point
🏦 Three real-world situations where people use quitclaim deeds and what goes wrong in each one
💰 Tax problems, liability issues, and mortgage traps that sneak up on people who did not read the fine print
🛡️ How to protect yourself before, during, and after filing a quitclaim deed—plus the mistakes that cost people thousands of dollars
The Core Problem: A Quitclaim Deed is Not the Same as Proof of Ownership
When you sign a quitclaim deed, you are transferring only whatever ownership rights you actually have. If you never owned the property in the first place, the deed transfers nothing—but it still gets filed. This creates a legal nightmare because the person receiving the deed thinks they own the property, but a court could later say they do not.
Federal recording statutes control how deeds become public records once filed. Recording happens at the county level, not the federal level, which means each state and county creates its own rules about how deeds get recorded. The deed itself does not prove you owned the property—it only proves that you signed a document saying you transfer whatever you have. Think of it like signing a receipt for someone else’s car; signing the receipt does not make you the owner of the car.
The biggest problem is this: once recorded, a quitclaim deed is nearly impossible to undo. Most states do not allow you to simply erase a recorded deed from the public record. If you made a mistake, signed under pressure, or gave away something you did not actually own, the damage is already done. You would need to go to court and prove fraud or duress—and that takes time, money, and a strong legal case.
A quitclaim deed transfers only grantor’s rights, which is why it carries risk for the person receiving the property. If the seller had no ownership rights, neither does the buyer. This is different from a warranty deed, where the seller guarantees they own the property and will defend your ownership in court.
What Happens at the County Recorder’s Office: The Filing Process Explained
When you take your quitclaim deed to the county recorder’s office, a clerk checks that the document meets basic requirements. The deed must have the correct legal description of the property, the names of the person giving it away and the person receiving it, the signature of the person giving it away, and the date. Most counties also require a notary public to watch you sign the deed before it gets filed.
The clerk does not verify that you actually own the property—that is not their job. They only check that the paperwork is complete and follows the county’s filing rules. After you pay the filing fee, which ranges from $15 to $50 in most counties, the deed gets scanned and entered into the public record system. Within days or weeks, the property is officially transferred on the public record, even if the transfer should never have happened.
Once the deed is filed, it becomes a permanent part of the county’s record. Recording creates constructive public notice, which means everyone in the world is assumed to know about the transfer because it is public information. This protects the new owner against someone else claiming they own the property, but it also locks in the transfer permanently. If you change your mind after the deed is recorded, you cannot simply walk back into the recorder’s office and ask them to delete it.
The new owner’s name now appears on the title, which is a document that lists who owns the property. If there is a mortgage on the property, the lender does not automatically know about the quitclaim deed, and this creates a serious problem. The property is now owned by someone new on the public record, but the original owner might still owe money to the lender. The lender can foreclose on the property and take it back to satisfy the debt, which means the new owner loses the property even though they now own it on the record.
Three Real Situations: Where Quitclaim Deeds Go Right and Wrong
Scenario One: A Parent Gives Property to a Child for Estate Planning
Maria owns a house outright with no mortgage. She wants to avoid probate—the long, expensive court process that happens after someone dies—so she decides to give the house to her adult daughter while Maria is still alive. Maria signs a quitclaim deed naming her daughter as the new owner. The deed gets recorded at the county, and her daughter’s name appears on the title.
| What Happens | Why It Matters |
|---|---|
| Daughter owns the property immediately | Property skips probate after Maria dies |
| Daughter’s name on the public record | Banks and courts recognize her as the owner |
| Maria loses all ownership rights | Maria cannot change her mind or take it back |
| Property taxes transfer to daughter | Daughter pays property taxes going forward |
| Daughter can sell the house anytime | No court approval needed for the sale |
Maria did not consider the tax consequences. Because she gave away the house while she was alive, her daughter receives the property at its current market value—not the value when Maria dies. If the house is worth $500,000 when Maria gives it to her daughter, and the house is worth $600,000 when Maria dies, the daughter’s tax basis is $500,000. Years later, when the daughter sells the house for $700,000, she owes capital gains taxes on $200,000 of profit ($700,000 minus the $500,000 basis). If Maria had waited and the transfer happened through her will after she died, the daughter would have received a “stepped-up basis” of $600,000, which would have reduced the capital gains taxes to just $100,000.
Maria also did not think about liability. If someone trips on the front steps of the house and gets hurt, they can sue the current owner—Maria’s daughter—not Maria. Maria gave away the property but kept living in it for several years, and now the liability falls on the daughter even though the daughter is not even there.
The stepped-up basis concept is critical to understand before transferring property to family members. When you die, your heirs receive property at its value on the date of death—not what you paid for it. This basis step-up eliminates capital gains taxes that would have accumulated during your lifetime. If you transfer property while alive using a quitclaim deed, you eliminate the stepped-up basis for your heirs. They inherit your original cost basis, which means they owe more in taxes when they eventually sell.
Scenario Two: A Divorcing Couple Uses a Quitclaim Deed to Split Property
James and Sarah are getting divorced. Their divorce agreement says Sarah keeps the family house, and James will transfer his ownership to her. James signs a quitclaim deed naming Sarah as the new owner. The deed gets recorded, and Sarah’s name appears on the title as the sole owner.
| What Happens | Why It Matters |
|---|---|
| James transfers his ownership rights to Sarah | Sarah becomes the only owner on public record |
| Sarah can now refinance the mortgage alone | Lender will only look to Sarah for repayment |
| James’s name comes off the title | James has no legal claim to the property |
| Divorce judgment binds both people to the deal | Court order makes the transfer enforceable |
| Sarah must pay all future property taxes | James has no obligation after the deed is filed |
James did not realize that the quitclaim deed does not remove his name from the mortgage. When Sarah refinances the loan in her name alone, James thinks he is free. But the original mortgage still has both their names on it, and if Sarah stops paying, the lender can come after James. Even though James does not own the property anymore, he is still legally responsible for the debt. James should have required Sarah to refinance the mortgage before he signed the quitclaim deed, but he did not ask about this.
Sarah also did not think about what happens if she cannot qualify for a new mortgage alone. If the lender says no because her income is not high enough, she is stuck. She owns the house on the title, but she cannot pay off the old mortgage because she cannot get financing. James owns nothing but still owes money.
This situation creates what attorneys call a “defective transfer” because the mortgage obligation does not follow the property transfer. James is stuck in a limbo where he no longer owns the house but still owes the debt. Sarah cannot refinance without James’s help, and James cannot help because his credit is already impacted by being on an old mortgage. The divorce court ordered Sarah to refinance, but if she cannot qualify, James has no recourse except to go back to court and ask the judge to force Sarah to pay him for the liability he still carries.
Scenario Three: A Real Estate Investor Adds a Business Partner Using a Quitclaim Deed
David owns a rental property that he purchased years ago. He wants to bring in his cousin Marcus as a business partner, so David signs a quitclaim deed transferring 50% ownership to Marcus. The deed gets recorded, and Marcus’s name appears on the title alongside David’s name.
| What Happens | Why It Matters |
|---|---|
| Marcus now owns 50% of the property | Marcus can make decisions about the property |
| Both names appear on the public record | Lenders and tenants know both own the property |
| Marcus is now liable for half the mortgage | Lender can pursue Marcus if David does not pay |
| Rental income must be split between them | Tax forms must list both as owners |
| Marcus can force a sale of the property | Marcus can take David to court to divide proceeds |
David did not create a written partnership agreement before signing the quitclaim deed. Now David and Marcus argue about whether Marcus pays half the mortgage or only receives half the rental income. The mortgage lender sees Marcus’s name on the title and can demand that Marcus sign the loan documents or the lender can foreclose. David’s original loan did not include Marcus, so the lender did not approve Marcus as a co-owner. The lender has the right to call the entire loan due immediately if someone new takes ownership of the property, even if the original borrower still pays.
Marcus also did not understand that his name on the title creates liability. If a tenant gets hurt on the property and sues, the lawsuit names both David and Marcus. Marcus’s personal assets are now at risk, even if Marcus did not cause the injury. A single lawsuit could force David and Marcus to sell the property to pay legal judgments.
This situation demonstrates why a partnership agreement must come before the quitclaim deed is signed, not after. Once Marcus’s name is on the deed and recorded, David and Marcus have created a legal relationship that neither of them fully understands. If Marcus wants to get out, he must sign another deed transferring his share back to David, and that transfer might trigger the due-on-sale clause again. If the lender enforces it, both David and Marcus could face foreclosure.
What Actually Changes After the Deed is Filed
After a quitclaim deed gets recorded, several things happen automatically, and most people do not realize the scope of these changes. The old owner’s name comes off the title permanently, which means they have no legal claim to the property anymore. If the old owner wants it back, they would have to buy it again at the current market price—they cannot simply undo the deed.
The new owner can now do almost anything with the property without getting permission from the old owner. They can sell it, rent it out, refinance it, or even tear it down and build something new. The old owner has zero say in what happens. If the new owner defaults on taxes or a mortgage, the property can be seized, and the old owner cannot do anything to stop it because they no longer own the property.
Recorded deeds create complete chain of title, which is the complete history of who owned the property and when they owned it. This chain gets longer every time someone new records a deed. If someone buys the property five years later, their title company will search back through the entire chain to make sure no one else can claim ownership. If your quitclaim deed is part of that chain, your name stays in the public record forever as someone who once owned the property.
The new owner gets what is called “legal title,” which is different from “equitable title.” Legal title means your name is on the official records and you have the right to use the property. Equitable title means you get the benefit of owning the property, like rental income or appreciation in value. When you sign a quitclaim deed, you give up both. The new owner now has both legal and equitable title, and you have neither.
If there is a mortgage on the property, the lender’s interest stays unchanged. The lender still owns what is called a “lien” on the property, which means they have the right to take the property back if the loan is not paid. The quitclaim deed cannot remove the lender’s lien—only the new owner paying off the loan or refinancing it can do that. If the new owner does not pay the mortgage, the lender forecloses and takes the property, regardless of who the deed says owns it.
The quitclaim deed becomes part of the property’s permanent ownership history, which affects future buyers and lenders. When a title company searches the property, they see the entire chain of ownership, including the fact that you once owned it. If a future buyer discovers that you quitclaimed the property away while still owing on a mortgage, the title company might flag this as a potential problem. Future title insurance premiums could be higher if there is any hint of title defects in the chain.
Tax Consequences That Surprise People
When you sign a quitclaim deed, you are creating a taxable event in most situations. The IRS treats the transfer as if you sold the property for its fair market value on the date of the transfer, even if no money changed hands. If you gave away a house worth $500,000, the IRS sees it as a $500,000 sale. If you purchased it for $300,000, you have a $200,000 capital gain, and you owe capital gains taxes.
Some transfers are exempt from this rule. Transfers between spouses during marriage or as part of divorce are not taxable, which is why divorcing couples often use quitclaim deeds without worrying about taxes. Transfers to a spouse do not trigger capital gains taxes under federal law. However, if you transfer property to someone you are not married to, you will owe taxes on any gain in value since you purchased the property.
Parents who give property to children face a particular tax trap. The transfer itself is not taxable to the parent, but it changes the child’s tax basis in the property. If a parent purchased a house for $300,000 and transfers it to a child when the house is worth $500,000, the child’s basis is $300,000. If the child later sells the house for $600,000, the child owes capital gains taxes on $300,000 of profit ($600,000 minus the $300,000 basis). If the parent had waited and transferred the property through their will after death, the child would receive a stepped-up basis of $500,000, and the capital gains taxes would be zero.
Some states also charge transfer taxes when a deed is recorded. New York charges transfer tax between 1% and 3.9% of the property value, depending on the price of the property and where it is located. A $500,000 house transfer could cost $5,000 to $19,500 in state transfer taxes alone. Other states do not charge transfer taxes, but local counties might. You must check your specific county’s rules before signing.
Federal gift tax does not apply to most property transfers because of the annual gift tax exclusion. In 2025, you can give away up to $18,000 to any single person without filing a gift tax return. However, if you transfer property worth more than $18,000 to someone who is not your spouse, you must file a gift tax form with the IRS, even if you do not owe any tax. Many people sign quitclaim deeds without reporting them to the IRS, which can trigger an audit years later.
The long-term versus short-term capital gains distinction also matters for tax purposes. If you owned the property for more than one year before transferring it, the recipient gets long-term capital gains treatment when they later sell, which means lower tax rates. If you owned it for less than one year, the recipient gets short-term capital gains treatment, which is taxed as ordinary income at higher rates. This is another reason to avoid transferring property quickly after purchase.
Liability Issues: Your Exposure Does Not Disappear
When you sign a quitclaim deed, you think you are done with the property. You are wrong. If you lived on the property before you gave it away, or if you caused damage to the property, you might still face liability. Old owners can be sued for injuries that happened while they owned the property if the injury was caused by something they did or failed to fix.
If you owned a rental property and a tenant got injured because you failed to fix a broken staircase, the tenant can sue both you and the new owner. Your quitclaim deed does not erase your past actions. Courts can go back and hold you responsible for negligence that happened while you owned the property. The new owner can also be held liable because they now own the dangerous condition.
If you fail to disclose known problems with the property before signing the quitclaim deed, you can be sued for fraud or misrepresentation. Many states require the previous owner to disclose hidden defects like foundation cracks, mold, or pest infestations. If you sign a quitclaim deed without disclosing these problems, the new owner can later sue you for damages, even though you no longer own the property. Your quitclaim deed does not protect you from these lawsuits.
Homeowner’s insurance presents another liability problem. Your insurance policy covers you only if you still own the property. After the quitclaim deed is recorded, the new owner should get their own insurance policy. If they do not, and someone gets hurt on the property, there is no insurance to pay for the injury. The injured person can then sue you, the previous owner, because your name appears in the chain of title as someone who once owned the property.
Environmental liability follows owners regardless of deed transfers. If the property is contaminated with hazardous materials, the EPA can hold all previous owners liable for cleanup costs. This is called “CERCLA liability,” and it does not go away when you sign a quitclaim deed. You could own the property for five years, sign the deed, and then find out years later that the property is contaminated. You could still be forced to pay for cleanup even though you no longer own it.
The statute of limitations on liability varies by state, but generally ranges from three to seven years for most personal injury claims. This means a person injured on the property while you owned it could sue you years after you sign the quitclaim deed. You should maintain homeowner’s liability insurance even after transferring the property, and inform your insurance company that you no longer own the property so they can provide appropriate coverage if a claim arises.
Mortgage Problems That Lock You In
If you sign a quitclaim deed transferring property that still has a mortgage, you have created a nightmare situation. The mortgage follows the property, not the owner. This means the lender’s lien is still on the property even though you no longer own it. You are still obligated to pay the mortgage because your name is on the loan documents.
When you apply for a new loan to buy a different property, the lender pulls your credit report. Your credit report shows the mortgage on the property you no longer own. The lender counts this mortgage as debt you still owe, even though you no longer own the property. This reduces your borrowing power for the new property because the lender thinks you have more debt than you actually do.
If you fail to make mortgage payments on the property you no longer own, your credit score drops. The missed payments appear on your credit report for seven years. This damages your ability to get loans, credit cards, and even employment, because many employers run credit checks. You no longer own the property, but you suffer the consequences of nonpayment.
If the property goes into foreclosure because the new owner does not pay the mortgage, the lender can sue you for the deficiency. A deficiency is the difference between what the property sells for at foreclosure and what you still owe on the mortgage. If you owe $400,000 on the mortgage and the property sells at foreclosure for only $350,000, the lender can sue you for the $50,000 deficiency. You do not own the property anymore, but you still owe the money.
The due-on-sale clause in mortgages allows the lender to demand payment in full if ownership changes. If you sign a quitclaim deed transferring the property to someone else, the lender can enforce the due-on-sale clause and demand that you pay off the entire mortgage immediately. If you cannot pay, the lender can start foreclosure proceedings. This happens even if the new owner is willing and able to make the payments.
Some lenders are more aggressive than others in enforcing the due-on-sale clause. A large national bank might immediately demand payment, while a smaller local lender might not notice or care about the transfer. However, you cannot count on this. The lender is legally entitled to enforce the clause, and waiting for them to notice the transfer is a risky strategy. Always notify the lender before or immediately after signing a quitclaim deed.
Title Insurance Does Not Protect You After You Sign
Many people think that title insurance protects the person who owns the property. It does—but only the new owner, not the previous owner. After you sign a quitclaim deed, you are no longer covered by title insurance. Title insurance is a one-time payment that protects the owner listed on the policy against future claims that someone else owns the property.
When the new owner takes possession of the property, they should purchase a title insurance policy in their name. This policy protects them if someone shows up years later claiming they own the property. If you, the previous owner, try to claim ownership after signing the quitclaim deed, the new owner’s title insurance will pay for the legal defense against your claim. You will have to pay for your own attorney if you want to challenge the deed.
If you sign a quitclaim deed by mistake or under duress, title insurance does not protect you. You would have to hire an attorney and file a lawsuit to challenge the deed. This is why it is critical to hire an attorney before you sign a quitclaim deed, not after.
Title insurance also does not cover fraud, unless the fraud is discovered before the policy is issued. If you commit fraud when you sign the quitclaim deed—for example, by forging the deed or lying about your identity—title insurance will not pay anything. The new owner can sue you directly for the fraud, and title insurance will not help either of you.
Title insurance policies have exclusions and exceptions, which are specific situations where the insurance will not pay. For example, if the title company searches the property and discovers a previous deed in your name that was never recorded, the title company might exclude that from the policy. The new owner would then be responsible for cleaning up the title problem. This is another reason to hire an attorney before signing—an attorney can review the title report and advise you about potential issues.
Government Benefits and Medicaid Traps
If you are receiving government benefits like Medicaid, SSI, or HUD housing assistance, signing a quitclaim deed can disqualify you from benefits. Medicaid has strict rules about property ownership, and giving away property is treated as a suspicious action by the government. When you transfer property using a quitclaim deed, Medicaid sees this as a gift and can impose a penalty period where you do not receive benefits.
Medicaid has what is called a “look-back period,” which means they examine all property transfers you made in the five years before you apply for benefits. If you signed a quitclaim deed during that five-year window, Medicaid counts the value of the transferred property as income or resources you gave away. This can delay your benefits for several months or even disqualify you entirely.
Many elderly people sign quitclaim deeds to give property to their children before they need nursing home care. They hope this will make the property unavailable to Medicaid, so Medicaid will pay for the nursing home instead of forcing them to spend down their assets. This strategy often backfires. If they apply for Medicaid within five years of signing the deed, Medicaid penalizes them for the transfer. They do not get Medicaid benefits for several months, and they still have to pay for the nursing home out of their own pocket.
The penalty period is calculated by dividing the value of the transferred property by the average monthly cost of nursing home care in your state. If you transfer a $300,000 house and nursing homes cost $8,000 per month in your state, you face a penalty period of roughly 37 months (300,000 divided by 8,000). During those 37 months, you do not receive Medicaid benefits, even if you are too poor to afford nursing home care yourself.
HUD housing assistance has similar property transfer rules, and some public housing programs require you to disclose property transfers within a certain timeframe. If you sign a quitclaim deed and do not report it, you can be evicted from public housing and forced to repay all the benefits you received.
The only way to avoid these penalties is to sign the quitclaim deed more than five years before you apply for Medicaid. However, this assumes you know in advance when you will need nursing home care, which is impossible to predict. If you are considering signing a quitclaim deed and you might need Medicaid in the future, consult an elder law attorney before signing anything.
Creditors and Judgment Collection
When you sign a quitclaim deed, you cannot use that transfer to hide assets from creditors. If a creditor sues you and gets a judgment, they can ask the court to set aside the quitclaim deed if it was signed to avoid paying the judgment. Creditors have legal tools to attack transfers that were made to defraud them.
Fraudulent transfer laws exist in every state and allow creditors to challenge deeds that were signed primarily to keep assets away from creditors. If a creditor can prove that you signed the quitclaim deed with the intent to defraud them, the court can reverse the deed and put the property back in your name. The creditor can then place a lien on the property and use it to satisfy the judgment.
Many people try to transfer property to a family member right before filing bankruptcy. They think this will keep the property out of the bankruptcy estate. Bankruptcy courts see through these transfers and can undo them. The bankruptcy trustee can recover the property, and it becomes part of the bankruptcy estate available to pay creditors.
If you sign a quitclaim deed and then immediately declare bankruptcy, the trustee will question the timing. Why did you give away property right before declaring bankruptcy? The trustee might force you to return to the property or force the person who received it to pay the value to the bankruptcy estate. This can take years to litigate and cost thousands in attorney fees.
IRS liens present a different problem. If the IRS gets a judgment against you for unpaid taxes, they can place a lien on your property. An IRS lien is filed at county level, just like your quitclaim deed. If you sign a quitclaim deed after the IRS has filed their lien, the IRS can challenge the transfer. The IRS lien might survive the transfer, and the new owner could inherit the IRS debt.
Courts apply a “badges of fraud” test to determine if a transfer was fraudulent. These badges include transfers to family members, transfers for little or no consideration, retention of possession by the transferor, and secrecy of the transaction. If multiple badges are present, the court is more likely to reverse the deed. Even if you had innocent reasons for the transfer, the presence of these badges can trigger court scrutiny.
What Happens to Jointly-Owned Property
If you own property jointly with another person and one of you signs a quitclaim deed, the deed transfers only that person’s ownership share. The other owner’s share remains unchanged. Many people do not understand this, and it creates confusion.
If Sarah and Michael own a house together and Sarah signs a quitclaim deed transferring her share to their daughter Jessica, then Jessica and Michael now own the property together as co-owners. Sarah has no ownership rights anymore. If Sarah dies, her ownership does not automatically go to Michael or Jessica—it went to Jessica when Sarah signed the deed.
If the property is owned in “tenancy by the entirety” (a special form of ownership available only to married couples in some states), a quitclaim deed by one spouse might not work. Tenancy by the entirety means each spouse owns the entire property, not just a share. In many states, one spouse cannot sign a quitclaim deed alone when the property is held as tenancy by the entirety. Both spouses must sign to transfer the property.
Joint tenancy with right of survivorship is another special ownership form. If two people own property in joint tenancy and one of them signs a quitclaim deed, the property converts from joint tenancy to tenancy in common. This changes what happens to the property if one owner dies. In joint tenancy, the surviving owner automatically gets the entire property. In tenancy in common, the deceased owner’s share goes through probate and is distributed according to their will.
Tenancy in common is often the worst outcome because it triggers probate at death. If Sarah owns property with Michael in joint tenancy and Sarah transfers her half to Jessica using a quitclaim deed, Michael and Jessica now own as tenants in common. When Michael dies, his half does not automatically go to Jessica—it goes through probate. If Michael’s will says his property goes to his children from a previous marriage, Jessica could lose half the property to Michael’s other children.
Common Mistakes That Cost People Thousands
Mistake #1: Signing a Quitclaim Deed Without a Valid Reason
Many people sign quitclaim deeds thinking they are harmless. They are not. Some people sign them to help a friend or family member, not realizing they are giving away ownership of an asset worth hundreds of thousands of dollars. Once signed and recorded, you cannot take it back.
Mistake #2: Failing to Pay Off the Mortgage Before Signing
If you still owe money on the mortgage, do not sign a quitclaim deed. Make sure the new owner refinances the loan and takes your name off before you sign. If you do not do this, you remain liable for the debt even though you do not own the property.
Mistake #3: Not Consulting a Tax Professional
Many people do not realize they owe capital gains taxes on property transfers. Consult a tax professional before signing to understand your tax liability. This could save you thousands of dollars. A simple one-hour consultation costs far less than the thousands you might owe in unexpected taxes.
Mistake #4: Failing to Check Title Insurance Implications
The new owner must get a title insurance policy in their name. If they do not, and a problem with the title appears later, neither of you will be protected. Make sure the new owner purchases title insurance before you sign.
Mistake #5: Not Understanding the New Owner’s Intentions
Some people sign quitclaim deeds without understanding what the new owner plans to do with the property. If the new owner immediately sells the property or uses it as collateral for a risky loan, you cannot do anything about it. Make sure you trust the person you are giving the property to.
Mistake #6: Signing Under Pressure or Without Understanding the Document
Never sign a quitclaim deed if you do not fully understand it. Never sign under pressure from family members or friends. Never sign if someone is pressuring you to do it quickly. Take time to read the document and consult an attorney if you have any questions.
Mistake #7: Transferring Property to Avoid Creditors
If you sign a quitclaim deed to keep property away from a creditor, the creditor can challenge the transfer. The court can reverse the deed and put the property back in your name so the creditor can collect. This strategy almost never works.
Mistake #8: Not Notifying the Mortgage Lender
Some people sign quitclaim deeds and do not tell the mortgage lender. The lender eventually finds out and can enforce the due-on-sale clause, demanding full payment immediately. Always notify the lender before the deed is signed.
Mistake #9: Forgetting to File the Deed Properly
If you sign a quitclaim deed but fail to file it at the county recorder’s office, the transfer does not become official. The deed must be filed to create the legal transfer. Make sure you understand your county’s filing requirements.
Mistake #10: Not Understanding State-Specific Rules
Each state has different rules about quitclaim deeds, recording requirements, and tax consequences. What works in one state might be illegal in another. Consult an attorney licensed in your state before signing.
Mistake #11: Assuming the New Owner Will Handle Everything
Do not assume the new owner will refinance the mortgage, purchase title insurance, or handle any other details. Get everything in writing before you sign. Create a document listing exactly what each person will do and by what date. Both people should sign this document.
Mistake #12: Not Keeping Documentation of the Transfer
Keep a copy of the signed deed, the notary acknowledgment, the county recording confirmation, and the date the deed was filed. You need this documentation for your tax records and for your protection if anyone disputes the transfer later.
Do’s and Don’ts for Signing a Quitclaim Deed
| Do This | Do Not Do This |
|---|---|
| Consult an attorney before signing | Sign without understanding consequences |
| Get the deed notarized by a notary | Sign without a notary—most counties require it |
| Make a copy of the signed deed | Lose the original or forget to keep a copy |
| Check that the new owner can refinance | Assume the new owner will handle the mortgage |
| File the deed at the county recorder | Trust someone else to file the deed for you |
| Do Not Do This | Why |
|---|---|
| Sign under pressure or without time | You lose legal remedies once recorded |
| Transfer property to hide assets | Creditors can challenge the transfer in court |
| Sign if you do not understand the document | You cannot undo the transfer based on confusion |
| Fail to report the transfer to agencies | You might lose government benefits or face penalties |
| Transfer property without getting paid | You give away value without compensation |
| Do This | Reason This Matters |
|---|---|
| Keep records of the transfer for taxes | You need documentation if IRS asks questions |
| Verify the legal description of the property | Wrong description means the deed is invalid |
| Understand implications for taxes, benefits, creditors | These areas have serious long-term consequences |
| Get the new owner’s full legal name correctly spelled | Spelling errors can invalidate the recording |
| Review the county’s filing requirements ahead of time | Each county has different rules and fees |
Pros and Cons of Using a Quitclaim Deed
| Pros | Cons |
|---|---|
| Simple and inexpensive to create | No warranty that you actually own the property |
| Quick to file at the county recorder’s office | Cannot be easily undone once recorded |
| No need for a title search before signing | Lender can enforce due-on-sale clause |
| Useful for transferring property between family | May trigger capital gains taxes |
| Effective for removing name from title in divorce | Creates liability issues for previous owner |
| Avoids probate when transferred before death | Does not remove you from mortgage |
| No appraisal required | May affect government benefit eligibility |
| Works for adding spouse or family to title | Title insurance does not protect previous owner |
| Cons | Why This Matters |
|---|---|
| No warranty means no legal protection | Buyer gets nothing if you do not own property |
| Cannot be undone after recording | Mistakes are permanent and very expensive to fix |
| Lender can demand immediate payment | Due-on-sale enforces prevents workarounds |
| May trigger capital gains taxes | You owe taxes even if no money changed hands |
| Creates liability for previous owner | Old owners can be sued for property problems |
| Does not remove you from mortgage | You stay liable for debt on property you do not own |
| May disqualify you from government benefits | Medicaid imposes penalty periods on transfers |
| Title insurance does not protect you | You cannot claim against the policy after transfer |
Important Federal Laws That Control Quitclaim Deeds
The Real Property Transfer Tax exists in some states and requires you to pay a tax when you transfer property using a quitclaim deed. The tax is usually a percentage of the property’s value. Some states do not charge this tax, but most do. Check your state’s rules before signing.
Federal gift tax rules require you to report transfers worth more than $18,000 per year to any single person. If you do not report the transfer, you might face an IRS audit. You do not owe tax on the gift, but you must file the form to avoid penalties.
Fair Housing Laws prevent you from using quitclaim deeds to discriminate, which means you cannot refuse to transfer property to someone because of their race, color, religion, sex, national origin, disability, or familial status. If someone claims you refused to sign a quitclaim deed for a discriminatory reason, they can file a complaint with HUD.
The Uniform Fraudulent Transfer Act applies to all states and allows creditors to challenge quitclaim deeds that were signed to defraud them. If a creditor can prove fraudulent intent, a court will reverse the deed.
The FIRPTA law requires foreign sellers to withhold 15% of the sale price when they sell U.S. property. If you are a foreign citizen and you sign a quitclaim deed transferring U.S. property, FIRPTA rules might apply to the new owner’s future sale of the property.
Recording Nuances: How County Rules Vary
Each county maintains its own recording office, and the rules differ significantly. Some counties require the deed to be recorded within a certain timeframe after signing, or the transfer is not official. Other counties have no deadline and will record deeds from years ago.
Most counties require a notary public to watch you sign the deed before it is recorded. The notary verifies your identity and confirms that you signed the document voluntarily. Some counties do not require notarization, but it is still a good idea to get it done anyway. A notarized deed is harder to challenge later because there is a record that a notary verified your identity.
Some counties charge additional fees for recording deeds. The base fee is usually $15 to $50, but some counties charge extra fees for documents that exceed a certain page length or contain certain types of information. Ask the county recorder’s office about the total cost before you file.
Electronic recording is becoming available in more counties. Some counties allow you to submit deeds electronically instead of delivering them in person. This speeds up the recording process, but you must follow the county’s specific electronic filing procedures. If you submit the document incorrectly, it will be rejected, and you will have to resubmit it.
The county maintains an index of recorded deeds, which is searchable by owner name and property address. After your deed is recorded, you can search the county’s index to confirm that the transfer was recorded correctly. If the deed was recorded incorrectly, you may need to record a corrected version.
Some counties require a cover page or information sheet with each deed. This cover page contains standardized information about the transfer, including the grantor and grantee names, property address, and a description of the document. If you forget to include this cover page, the county might reject the entire filing.
County recording offices have different hours, and some are only open Monday through Friday during business hours. If you need to file a deed in person, call ahead to confirm the hours and ask if you can mail the deed instead. Mailing is often faster and more convenient than traveling to the recorder’s office.
Scenarios Where You Should NOT Use a Quitclaim Deed
If you are selling property and receiving money, use a warranty deed instead. A warranty deed includes a guarantee that you own the property and will defend the buyer against anyone who tries to claim ownership. A quitclaim deed gives no such guarantee.
If you are concerned about fraud, do not use a quitclaim deed. If the person you are transferring to might challenge your ownership later, a warranty deed protects you because you are guaranteeing that you own the property.
If the property has a mortgage and you are not sure the new owner can refinance, do not use a quitclaim deed. Wait until the mortgage is paid off or until the new owner has confirmed that they can refinance in their name alone.
If you are receiving Medicaid or other government benefits, do not use a quitclaim deed without consulting a benefits administrator first. The transfer might cause you to lose benefits.
If you are in debt or might face lawsuits, do not use a quitclaim deed to transfer property to a family member. A creditor can challenge the transfer as a fraudulent conveyance.
If the property is in a state where you do not live, make sure you understand that state’s specific rules about quitclaim deeds. Some states have unusual recording requirements or tax rules.
If you are trying to transfer property as part of a complicated estate plan, use a more sophisticated tool like a trust or an enhanced life estate deed. A quitclaim deed is too simple for complex situations.
If you are uncertain about whether you actually own the property, do not sign a quitclaim deed. Have a title search performed first to confirm your ownership.
What You Need Before You Sign
You need the correct legal description of the property, which is available from the county assessor’s office or from your property deed. The legal description is not the same as your street address. It might say something like “Lot 5, Block 2, Riverside Subdivision” or include township and range information for rural property.
You need the full name of the person you are transferring to, spelled exactly correctly. If you spell their name wrong on the deed, it might not be recorded correctly, or the transfer might be invalid.
You need to confirm that you actually own the property. Check the current deed or title to make sure your name appears as the owner. If your name is not on the current title, you cannot sign a quitclaim deed.
You need to know whether there is a mortgage on the property. Check with your mortgage lender or pull your own credit report to see what loans are outstanding.
You need the updated legal description if the property has been subdivided, combined with other property, or legally altered since you purchased it. Ask the county assessor’s office for the current legal description.
You need to understand the implications for taxes, benefits, creditors, and mortgage lenders. Consult professionals in each of these areas if any of them apply to your situation.
You need to know whether the property is in tenancy by the entirety, joint tenancy, or sole ownership. This affects whether one person can sign the deed alone.
You need to confirm your identity with a government-issued ID when you meet with the notary. The notary will not notarize the deed without proper identification.
FAQs
Can I cancel a quitclaim deed after it is recorded?
No. Once recorded, a quitclaim deed cannot be cancelled by simply asking the county to delete it. You would need to go to court and prove fraud, duress, or lack of capacity to have the deed reversed by a judge.
Does a quitclaim deed remove my name from the mortgage?
No. The quitclaim deed only transfers ownership; it does not remove you from the loan documents. You remain liable for the mortgage payment. The new owner must refinance to remove your name from the loan.
Do I owe capital gains taxes on a quitclaim deed?
Yes, in most cases—unless the transfer is to a spouse during marriage or as part of divorce. You owe taxes on any gain in property value since you purchased it. Consult a tax professional to calculate your specific liability.
Can I use a quitclaim deed to transfer property during a divorce?
Yes, if your divorce agreement requires it. However, the quitclaim deed does not remove you from the mortgage, so make sure the new owner refinances before the deed is recorded.
What happens if I sign a quitclaim deed by mistake?
You cannot undo it by simply asking the county recorder to delete it. You would need to file a lawsuit and prove that you did not understand what you were signing or that you were pressured into signing it.
Can creditors challenge a quitclaim deed?
Yes, if you signed it to avoid paying them. Creditors can go to court and ask the judge to reverse the deed if they can prove you transferred the property to defraud them.
Do I need a lawyer to sign a quitclaim deed?
No, but it is highly recommended. An attorney can review the deed, explain the consequences, and ensure you understand what you are signing before you sign it.
What is the difference between a quitclaim deed and a warranty deed?
A warranty deed includes a guarantee that you own the property. A quitclaim deed transfers only what you actually own and includes no guarantee. If you do not actually own the property, the warranty deed makes you liable but the quitclaim deed does not.
How long does it take for a quitclaim deed to be recorded?
It typically takes between three and 14 days, depending on how busy the county recorder’s office is. You can usually call or visit the office to check the status of your specific deed.
Can I transfer property to someone out of state using a quitclaim deed?
Yes, the location of the new owner does not matter. However, you must follow the recording rules of the county where the property is located, not where the new owner lives.
Do I need title insurance if I am receiving property through a quitclaim deed?
Yes, and you should purchase a policy in your name. Title insurance protects you against future claims that someone else owns the property. It does not matter how you received the property; you should always have title insurance.
What happens if the person I transfer to with a quitclaim deed cannot afford the mortgage?
The lender can foreclose on the property and sell it to pay off the mortgage. You do not own the property anymore, but the foreclosure might still appear on your credit report if your name remains on the loan documents.
Can I use a quitclaim deed to avoid probate?
Yes. If you transfer property using a quitclaim deed before you die, the property passes directly to the new owner and does not go through probate. However, you lose control of the property once the deed is recorded.
What if the new owner stops paying property taxes on the property?
The county can foreclose and sell the property at auction to collect unpaid taxes. You do not own the property anymore, but the foreclosure still affects the property’s value and any title chain if you ever try to claim ownership.
Does a quitclaim deed work in all 50 states?
Yes, quitclaim deeds are recognized in all 50 states. However, each state has different rules about how they must be recorded and what legal effects they create. Check your specific state’s requirements.
Related reading
- Does a Quitclaim Deed Prove Full Ownership? (w/Examples) + FAQs
- Does a Quitclaim Deed Affect Property Taxes? (w/Examples) + FAQs
- Can Quit Claim Deed Filed After Death? (w/Examples) + FAQs
- Does a Quitclaim Deed Need to Be Recorded? (w/Examples) + FAQs
- Los Angeles County Quitclaim Deed Requirements (w/Examples? + FAQs
- Tax Consequences of a Quitclaim Deed Explained (w/Examples) + FAQs