Ownership by Quitclaim Deed

You will often see quitclaim deeds in situations where the grantor and grantee are related, have been in a prior relationship (such as former co-owners), or in other situations where the history of the property is known to both parties. This is because a quitclaim deed has no guarantees, whatsoever. Therefore, if the grantee ended up with a property with an unknown tax lien, the grantee would be out of luck with regards to property warranties.

Succinctly, a quitclaim deed transfers whatever interest the grantor has in the property, without any guarantees as to the nature of that interest. Therefore, if the grantor has previously sold the property to another, the quitclaim deed does not even transfer ownership. As noted in this Indiana case:

That a quitclaim deed conveys only the estate or interest held by grantor at the time of its execution, is a principle so well established as to broach no argument. It is equally established that such a conveyance executed after the grantor has parted with title vests no interests or title in the quitclaim grantee. Such deed does not even convey color of title.^[1]

There is one exception to this rule, which is called the “bona fide purchaser for value” rule. Essentially, this rule gives some protections to someone who purchases land without knowing that it has been previously sold to another, and who has paid consideration (“value”) for it.

[1] Coons v. Baird, 148 Ind. App. 250, 257, 265 N.E.2d 727, 731-32 (1970)