Growing up, you may have heard that it’s a bad thing to quit. But here in Illinois, many people transferring real estate nevertheless consider a “quit claim deed” as a way to exchange their property quickly.
Here in Illinois, we generally use two words to refer to quit claim deeds — a type of deed which is used to convey property ownership without any warranties, and is often used among close family or friends. You may also, however, see the term displayed as one word (“quitclaim”). You may even see this type of deed erroneously referred to sometimes as a “quickclaim” (or “quick claim”) deed.
For anyone hoping to buy, sell, or receive real property in Illinois, this term is an important one to know. So, with that being said, let’s explore quit claim deeds in a little more depth:
What Is a Quit Claim Deed?
In short, a quit claim deed is a type of deed used to transfer the ownership of property in situations where the person transferring the property — the grantor or seller — does so without promising any warranties of title to the person receiving the property — the buyer, grantee, or transferee.
For this reason, a quit claim deed is distinct from a general warranty, a type of deed which conveys title to a property which includes a guarantee from the seller that they are transferring the property free and clear of any claims, such as outstanding liens. Illinois also permits special warranty deeds, which convey property with a limited warranty of title.
With a quit claim deed, then, the grantor makes no guarantee about whether or not they own the property free and clear. They are transferring their interest in the property, whatever it may be. As a result, this means that the grantee or transferee will assume the risk of taking on any defects of title or other problems associated with owning the property. Broadly speaking, the grantee will have their hands tied, and may not be able to sue the grantor or give up their claim if title issues emerge.
When Are Quit Claim Deeds Used?
Because it does not provide warranty of title, a quit claim deed is most often used in situations where the property must be transferred quickly, or in situations where the grantor and grantee know and trust one another well. Quit claim deeds are often used in situations where the property is being transferred as a gift, or when a home is changing hands between members of the same family or close friends.
Some common circumstances in which a quit claim deed may be considered include:
- Transferring property from one (ex-)spouse to another as part of a divorce
- Transferring the interest of one co-owner to another — for instance, if one co-owner buys out the other
- Creating shared ownership with a new co-owner by transferring some or all of your interest, or by changing the way that owners hold title (e.g., transferring from joint tenancy to tenancy in common)
- Giving up ownership rights to inherited real estate
- “Gifting” the property to a family member or friend at a significantly reduced cost
Important Considerations About Quit Claim Deeds
Broadly speaking, the process for quit claim deeds is generally fairly straightforward — though here in Illinois, the precise requirements may vary, depending on the county in which you live. Generally speaking, the quit claim deed must clearly identify the grantor and grantee, and state that one is conveying and quitting claim to the other. The form is also not complete and valid without a complete legal description of the property; all documents must be formatted properly, signed properly, and notarized. The deed must also receive a tax stamp, and be filed correctly with the Recorder of Deeds for the county in which the property is located.
There are also important tax considerations for quit claim deeds here in Illinois. For instance, in many cases a quit claim deed may transfer the property for a price low enough to exempt it from transfer taxes. However, a gift tax may apply in certain circumstances.
All told? A quit claim deed can be a quick way to transfer ownership interest for a property, but it is not going to be the right fit in every situation — and is certainly not without its risks and special considerations. If you are considering a quit claim deed — or any other mechanism for transferring ownership in a property in Illinois — you may wish to speak to an experienced local real estate attorney. A knowledgeable attorney can help you understand all of the options available to you based on your unique circumstances, while also addressing any questions you may have and helping to ensure that your forms are completed and filed accurately.
Looking for Help Understanding Real Estate Law in Illinois?
It’s important to remember that when it comes to real estate in Illinois, the way your paperwork is set up can have long-term ramifications for your personal and financial future. Understanding the various ways you can transfer ownership of property in Illinois is a key piece of the puzzle – but there is always more to discuss.
Want to talk over all things Chicagoland real estate with an experienced legal pro? Don’t hesitate to continue the conversation with the Gunderson Law Firm.
Our attorneys and staff handle a wide range of real estate legal services, including:
- residential and commercial purchase & sale agreements
- mortgage conveyancing
- estate planning & transitions
- asset protection planning
- title examinations & disputes
For families, investors, and developers alike, the Gunderson Law Firm possesses the expertise and insight necessary to make the most of your time and budget – all reinforced by years of experience and long-term connections throughout Chicago’s real estate, finance, title, and insurance industries. Feel free to drop us a line whenever you’re ready to learn more or to schedule your free initial consultation.