A quitclaim deed is one of the common options to transfer ownership of a property in Arizona. Quitclaim deeds can be used in a variety of situations to legally transfer property to a trust, co-owner, or different ownership structure. There are many options for generating a quitclaim deed, but you should proceed with caution before executing the transfer. You should consult with an experienced real estate attorney before moving forward so that you understand all legal implications of the transfer. Here is our guide to understanding quitclaim deeds, when they can be used, and what to consider before executing a quitclaim deed in Arizona.
When to Use a Quitclaim Deed in Arizona
A quitclaim deed is used to legally transfer ownership of property, but need not be used in conjunction with an actual sale of that property. Ownership of the property can be transferred to another person or even a corporate entity. The same process can be used to add or remove a person or corporation from the deed to the property. Quitclaim deeds are most commonly used to transfer ownership of a property after a marriage or divorce, and when a property is owned by multiple people with one or more parties retaining ownership of the property. Quitclaim deeds are also common when property ownership is transferred to a living trust.
The process is straightforward for using a quitclaim deed. Essentially, a quitclaim deed form is filled out, signed and notarized. The form is recorded with the County Recorder’s Office in the jurisdiction in which the property sits. The process is legally binding and can have unintended consequences. Therefore, it is highly recommended that you consult with an attorney before filing with the County Recorder’s office to make sure your intentions have been accurately conveyed in the quitclaim deed.
Think Twice About Free Online Quitclaim Deed Templates
There are many online options to find a free quitclaim deed template for transferring ownership of a property, but you should think twice about using a free template. It can be tempting to save some money and get things done quickly with a free online template. Even if you just have a real estate attorney in Arizona review the quitclaim deed, you can potentially save yourself legal and tax issues that could have easily been avoided. It is generally best to consult with an attorney about your intentions for the transfer of ownership and get advice on the best way to accomplish that process.
Risks of a Quitclaim Deed
Quitclaim deeds are a simple way to convey the title of a property. However, they offer no guarantees on the title of the property. For example, a general warranty deed contains six covenants of title: the covenant of seisin, the covenant of no encumbrances, the right to covey, the covenant of quiet enjoyment, the covenant of warranty, and the covenant of further assurances. By contrast, quitclaim deeds do not even provide assurance that the person conveying title has ownership of the property or that the property has a clean title. Quitclaim deeds only convey the rights that the conveyor has at the time of the transfer, if any.
There are no due diligence requirements on a quitclaim deed in Arizona. This is a common reason quitclaim deeds are used to transfer property to a living trust or after a marriage. Typically, the grantor does not need to provide those additional assurances of a free and clear title in those cases. This is the reason you want to consult with an experience real estate attorney before using a quitclaim deed. Another deed, like the general warranty deed referenced above, or special warranty deed could be a better option in many cases. Thus, you want to understand whether you should perform additional due diligence on the property and parties involved before executing a quitclaim deed.
Tax Implications of Quitclaim Deeds
A quitclaim deed will not release the property from any tax liens. The person or company receiving ownership of the property from a quitclaim deed may also be responsible for property taxes going forward. You will want to consult with a tax professional and real estate attorney to understand all liabilities involved with using the quitclaim deed whether you are transferring property into your name or releasing yourself from property ownership.
MacQueen & Gottlieb has significant experience with quitclaim deeds in Arizona. Our firm can assist with document preparation and proper due diligence on the property. Our attorneys can also educate you on all the options available for transferring ownership of a property. Contact us today at 602-533-2840 to schedule an initial consultation or make an appointment online.