Quitclaim deeds in Chicago can serve as an efficient way to transfer property between family members. People can also use the deeds to add or remove someone from a title, or to transfer property to a living trust or LLC. Quitclaim deeds are not the wisest solution in all situations, though, such as in real estate transactions that involve financing.
Protect your interests before you sign anything. Call The Rogoff Law Group at (847) 768-2194 for guidance.
What a Quitclaim Deed Does—and Doesn’t Do—in Illinois Property Transfers
A quitclaim deed is a legal property transfer document. It lets one person (the grantor) transfer his or her interest in a property to another person (the grantee) without making guarantees about the title.
In other words, the grantor does not swear to actually own the property free and clear. The grantor does promise to transfer any of the property rights he or she possesses. In contrast, a warranty deed includes legal guarantees that the title is free of liens or other encumbrances. Major features of an Illinois quitclaim deed include:
- Fast and simple: Good for informal or family-related property transfers
- Low cost: Relatively inexpensive to prepare than other deed types
- No title warranty: No guarantee that grantors own the property
- No requirement for title insurance: Title insurance usually not part of the transaction but can be included
One way to think of a quitclaim deed is as a, “What you see is what you get,” property transfer. Quitclaim deeds DO NOT verify grantors’ legal rights to transfer property, nor do they remove existing liens, mortgages, or other claims. Quitclaim deeds also do not give buyers protection if there are title defects. Thus, it is important to understand quitclaim deed restrictions before using such a deed. A real estate lawyer can help.
When It Makes Sense to Use Quitclaim Deeds in Illinois
Since there is a lack of title warranties, Illinois quitclaim deeds generally work best when trust exists between the grantor and grantee or when it is not critical to verify ownership interest in the property.
Transferring Property Between Family Members
In Illinois, about 45.5% of homes are occupied by the owners. Family member property transfers are perhaps the most frequent use of quitclaim deeds in Chicago and Des Plaines. If a parent is transferring ownership to a child or spouses are transferring property between themselves, the inherent trust in the relationships typically makes quitclaim deeds appropriate. Even in a divorce, one spouse may use a quitclaim deed to release his or her interest in the marital home to the other spouse as part of a settlement agreement.
Adding or Removing Someone from a Title
If you want to add or remove a person from the title, using a quitclaim deed could make sense. You could use one to remove a co-owner who wants to be removed, for example. Quitclaim deeds can work well, too, if you want to transfer ownership into a living trust or business entity.
Correcting Mistakes
Sometimes, recorded deeds have clerical or typographical errors. One use of a quitclaim deed can be to correct a misspelled name or an incorrect legal description of the property.
However, quitclaim deeds can be unwise in a variety of situations. One is when you purchase property from a stranger or in an arms-length transaction, such as a traditional home sale. In contrast, non-arm’s length transactions are those between parents and children, spouses, and transfers to a trust or LLC the grantor controls.
Another scenario in which to avoid quitclaim deeds are real estate sales that involve mortgages, title insurance, or financing. Commercial real estate transfers also require complete and thorough due diligence, making quitclaim transfers not appropriate for them.
In these scenarios and in arm’s length transactions, a warranty deed or special warranty deed may be able to offer the protection and clear title that a quitclaim deed cannot.
Why You Should Consult a Real Estate Lawyer Before Signing a Quitclaim Deed in Chicago
Quitclaim deeds can be simple and inexpensive, but carry serious legal implications. Consulting with a real estate lawyer in Illinois is a smart move before preparing or signing a quitclaim deed. This is especially true if the property is valuable or has legal complications.
Draft and Record the Deed Properly
A quitclaim deed that is incorrectly drafted or unrecorded can lead to transfer disputes or delays, or even invalid transfers. A real estate lawyer ensures the property transfer document complies with Illinois real estate law, including the legal description, grantor/grantee names, and notary requirements.
Identify Hidden Problems with the Title
Quitclaim deeds offer no protection against title defects. Thus, it is important to verify whether the grantor actually owns the property and if there are liens, judgments, or easements. An attorney can order a title search and advise you on whether title insurance could help, even if it is not required.
Advise on Tax and Financial Implications
Transferring property, even as a gift, can come with property tax or capital gains implications. A real estate lawyer can serve as your guide to real estate contracts and help you understand these impacts.
Prevent Future Disputes
Signing a quitclaim deed without legal advice can backfire if the other party later claims fraud, coercion, or misunderstanding. A lawyer can draft or review the deed for clarity issues and ensure that both parties understand their rights.
How much does a real estate lawyer cost? The amount varies, but many real estate lawyers in Illinois charge a flat fee ranging from about $300 to $1,000 for simple deed transfers.
Lawyers also can help with issues such as what to do when a seller breaches a real estate contract and draft and review other types of documents beyond deeds, such as purchase agreements, escrow instructions, and closing documents.
The Rogoff Law Group can help with many types of real estate transactions. Contact us today.
