How do Quit Claim Deeds work in Florida?
Almost daily we receive inquiries about “adding a name to a deed” or transferring a property to a relative for estate planning purposes. In many cases, the parties placing the call do not have the ability to effectuate such a transfer and are often disappointed to learn that they need the full cooperation of the current owner.
Understanding the Florida Quit Claim Deed Process!
The easiest way to convey ownership of property is through the use of a quitclaim deed. But what are they and how do they work exactly?
Quitclaim deeds are relatively informal and are usually used to transfer property quickly.
But despite this, they are often misunderstood and can cause serious clouds on title if improperly done. To explore a more comprehensive list of the dangers of quitclaim deeds (particularly when done without the guidance of an attorney), visit our recent article: Quitclaim Deeds in Florida – a Precautionary List.
The following explains the nature of and potential ways in which quitclaim deeds can be used to help you with your real estate transfer needs.
What are quit claim deeds?
Quit claim deeds are legal documents used to transfer ownership, in whole or in part, from one person to another.
Unlike other types of deeds, they do not provide warranties or protections that the interest being transferred is clear, marketable or even legally owned by the party purporting to transfer it.
The transferring party is referred to as the grantor while the person receiving the property is called the grantee.
A grantor cannot transfer more interest in a property than he or she owns. This means that the grantee can only receive a maximum of what the grantor owns at the time the quitclaim deed is transferred.
So, if a grantor has clear and marketable title, then the grantee will receive clear and marketable title as well.
However, if the property is encumbered in a manner that affects the grantor’s ownership, then a quitclaim deed passes on that same problem to the grantee. For this reason, quitclaim deeds should only be used between closely known parties who trust one another.
Requirements for Quit Claim Deeds in Florida
In Florida, quitclaim deeds must contain specific information as stated in section 695.26 of the Florida Statutes to be considered valid. All quit claim deeds must clearly state the following:
- The name of the current owner of the property who intends to transfer some or all their interest in the property. This is known as the Grantor.
- The name of the person or entity who will be receiving the grantor’s interest in the property. This party is known as the Grantee.
- The money or value given to the grantor in exchange for his/her interest in the property. This is known as the Consideration.
- The formal Legal Description used to identify the property.
- The signature of the Grantor (this causes a lot of confusion since many folks believe they, as the grantee, can sign a deed transferring property of the grantor to themselves).
- The signature of two independent witnesses, one of whom could be the notary.
- The stamp and signature of a notary licensed in the jurisdiction in which the deed is being signed.
If a quitclaim deed does not have any of these prerequisites, it will be deemed deficient and may not transfer title as intended by the parties.
When to use a quit claim deed
- To effectuate a martial settlement agreement: when divorcing spouses agree that one or the other will take full ownership of the property, the transferring spouse will have to execute a transfer deed.
- When an individual seeks to transfer property to their business entity (such as a LLC or corporation) or a living trust for estate planning purposes.
- When transferring property to closely known individual such as a family member. Truthfully, transfers outside of close family members (such as parents to children) should never be accomplished using a quitclaim deed.
- Quitclaim deeds cannot be executed after the death of a current owner to transfer that owner’s interest since the document itself needs to be executed by the deceased owner.
Despite the risks and the common misconceptions about quitclaim deeds, they are a very useful tool for the quick and uncomplicated transfer of property.
However, they should be used only in specific circumstances between known parties and always with the help of a professional.
To ensure that your quitclaim deed is accurately drafted and to avoid the pitfalls of going it alone, contact your real estate attorney to discuss whether a quitclaim deed is appropriate for your specific needs.