What is a Quit Claim Deed
A quit claim deed is a legal document that allows you to quickly and easily transfer Colorado real estate from one person or entity to another. Truthfully, it does not transfer much in the way of guarantees with regard to the validity of the grantor’s interest in the property. In other words, the grantor (the person granting, or transferring, the Colorado real estate) on a quit claim deed may not actually own anything, let’s say, the individual listed in the public records as the owner had sold, transferred, or otherwise titled the property away to someone else somewhere along the line, but had changed the public records and forgot to or maybe even forgot to record such transaction or knew but thought it was recorded elsewhere, yet they gave the property to someone pursuant to say, a Colorado quit claim deed. If the grantor did not own the property, then the grantee (the person, or persons, receiving the Colorado real estate) receive pretty much nothing with regard to that Colorado quit claim deed. However, s/he/they still must abide by the grantor’s promises, called covenants, associated with the Colorado quit claim deed.
Because of this lack of guarantees, most title companies and lenders will only issue a Colorado title insurance policy, i.e . , a policy which provides for many protections against unknown future claims, on a Colorado quit claim deed only if the deed is executed by the current record owner, usually personally before the title company’s designated title officer, is not signed until the time of the loan closing, upon the purchase of the property, and if the real estate is within the chain of title, meaning that each person in the chain of title prior to the current record owner, each conveyed his or her interest, one to another, so that the current record owner has some rightful claim to the property. In our example, what if the chain of title started with the sale by a previous owner to our original grantor and then our grantor sells or transfers the property to another person? The current record owner (who may not be the grantor) thus acquired the property that is being transferred with the quit claim deed.
Quit claim deeds are often used to create life estates, including those for spouses or parent to child. For example, Mom and Dad may transfer a portion of their Colorado ownership to Son or Daughter, reserving the balance and retaining a life estate for themselves. Thus, Son or Daughter does not own any portion of the real estate, which is important for Medicaid purposes, until Mom and Dad die. At such time, the current record owner, who may not have been the grantor on the Colorado quit claim deed, will have a fee simple interest and title will no longer be in the parents, only the children, without further probate.
Colorado Quit Claim Requirements
A quit claim deed must be in writing and signed by the grantor. C.R.S. 38-30-113(2)(b). There are no other requirements such as acknowledgment in front of a notary, witness or recording. A quit claim does not have to be recorded immediately. Although recording a quit claim deed is not required by law to make it effective, C.R.S. 38-35-109(2), it effectively conveys title as of the date it is delivered. The title company will require that the deed be recorded in order to insure the grantee as the owner. C.R.S. 38-30-113(3).
The parties are free to impose additional requirements to make a quit claim deed effective. For example, a quit claim deed that calls for payment at the time of use, and has not been paid in a timely fashion, would not be effective without a release by the grantee or filing a bond with the county clerk’s office. Something to keep in mind – quit claim deeds are typically used when the parties have agreed on the price and the transaction is based on the agreement. There may be other contingencies in the agreement that have to be satisfied prior to the conveyance of real estate.
The statute does not specify any type of consideration for a quit claim deed and doesn’t set bottom amounts in consideration, it just says "for a valuable consideration". This means that you can use a quit claim deed for $1, $10, $100, $1000 or a larger amount, as long as you actually have the consideration for the transaction. If the transaction is for $1 but you don’t have the money, then the transaction is fraudulent and it could be considered as theft.
The presumption is that if a valid lease exists, the grantor warrants that the current lease is valid and enforceable. But if a new owner takes title to real estate subject to lease, the new owner becomes a landlord and has to comply with the Colorado Landlord and Tenant Act.
If the lessor enters into a lease with a tenant, but then conveys the property to a grantee by quit claim deed, the grantee owns the property subject to the term of the lease. Provided, however, that the grantee should not record the deed unless all of the partners have signed it.
Preparing the Colorado Quit Claim Deed
- The Grantor (Seller) must first determine the current legal description of the property being conveyed. The owner can usually find this on their most current deed (most likely a warranty deed) in the property’s chain of title which can be found at http://scanny.co.clark.co.us/sire/sirepdf.aspx. Or, the Grantor can obtain a current legal description from their title insurance company or civil engineer.
- The Grantor (Seller) must complete the Colorado quit claim deed form, including the legal description as well as a full legal description of the Grantor and Grantee (Buyer). This must be signed by the Grantor and notarized.
- Once a fully completed quit claim deed has been executed, it will be delivered to the Grantee (Buyer).
- The Grantee (Buyer) will have the quitclaim deed recorded with the County Clerk and Recorder’s Office in the County where the Property is located. Recording the quit claim deed will require a recording fee for the document. Such fees vary from county to county and range from $10.00 to $13.00 for the first page in addition to 2-3.00 for each additional page. In addition to the recording fee, a transfer tax will be due at the time that the quit claim deed is recorded as required by State law regarding the conveyance of real property. Such taxes also vary from county to county and can range from $9.80 to $13.60 per $5,000.00 of rental value or purchase price.
- Upon recording of the quit claim deed, the Grantee (Buyer) will be able to obtain a copy of the same from the County Clerk and Recorder’s Office as proof of the Grantor’s (Seller’s) relinquishment of rights to the Property. In addition to the quiet claim deed, the County Clerk and Recorder’s Office will also provide a receipt showing the the recording fee and transfer tax that was paid in connection with the recording of such document.
Filing your Colorado Quit Claim Deed
Before filing a quit claim deed in Colorado, it is important to know that they are not filed in the courts. Instead, quit claim deeds are filed with the county clerk and recorder, the same office that handles marriage licenses and real estate sales transactions. Whatever county you live in, the local clerk and recorder’s office will be able to help you file the appropriate documents to effectively transfer ownership of your home, property or other assets.
Most county clerk and recorders charge a small fee to accept and file real estate transfer documents, including quit claim deeds . The cost varies county by county, so be sure to contact your local clerk and recorder for their filing fees.
The filing process is straightforward. Simply bring the quit claim deed and any required documents to your county recorder’s office along with payment. After processing the documents, the clerk and recorder’s staff will return the signed deed to you along with paying an additional fee. This deed should be given to the beneficiary indicated on the document.
Risks and Drawbacks of a Quit Claim Deed
A Colorado quit claim deed is generally a quick and simple document but it is not without its risks and consequences. It is important to keep in mind the possibility that a person’s ownership of the real property may be disputed and what recourse a person has if such a dispute arises. A deed conveys whatever right, title or interest the grantor has at the time of the grant. However, if the grantor has no right or interest in the land at the time of the grant a quit claim deed effectively transfers nothing. If the grantor’s title is defective, the grantee takes the property subject to the defect.
In situations where the parties are contemplating a sale by an heir to an estate, it is likely that the estate would want a more formal process to transfer the property from the estate to the buyer.
There are a number of titles which cannot be conveyed by a quit claim deed. For example, a quit claim deed cannot transfer any title that is held in a bank, lending institution or court under mandatory restrictions. For example, property held in a deed of trust cannot be released from the deed of trust by a quit claim deed. Esta J. Nurre v. Wells Fargo Bank, N.A., 2014 COA 186, where the court held that a lender may not foreclose upon a quit claim deed on property held in a deed of trust. The deed of trust (mortgage) must be foreclosed upon.
Even though a quit claim deed transfers any current interest the grantor has, there are some situations where the grantor has no current interest in the property to convey to the grantee. In these situations the quit claim deed may not transfer any interest from the grantor to the grantee even though the deed appears to be a valid conveyance. One example where this might occur is when the grantor is a tenant under a leasehold interest but the leasehold interest was previously modified or terminated and the original owner grants a quit claim deed to the tenant. If there is no leasehold interest to transfer under the quit claim deed, it transfers no interest to the grantee. If the tenant subsequently conveys the interest under the leasehold to a third party, that third party would take no interest in the leasehold property since the original tenant never owned a valid leasehold interest.
If you’re thinking about executing a quit claim deed to convey title to your real property, you may want to consult with an attorney to make sure that is the best method for conveying the property. Depending on your situation, you may want to avoid the potential risks associated with using a quit claim deed.
FAQs
FAQ: Do Colorado Statutes Require a Notary Public to Witness the Grantor’s Signature on a Quit Claim Deed?
Yes. According to Colorado Revised Statute 38-35-113, a quit claim deed needs to be acknowledged by a notary public after the grantor (seller) has affixed his/her signature. This statute is just one of Colorado’s quit claim deed requirements that ensure a property title is accurately transferred to the buyer. A few other specific requirements include:
FAQ: Does Signing a Quit Claim Deed Affect a Deceased Person’s Mortgage?
Signing a quit claim deed only transfers a home title into a buyer’s name . It does not involve a home mortgage or affect the mortgagor (home loan borrower). If the deceased person used the home to secure a mortgage, however, the lender may foreclose on the property.
FAQ: Are Quit Claim Deeds Required to Transfer Home Ownership?
Yes, quit claim deeds are required to transfer home ownership in Colorado. The only exception is that a quit claim deed is not needed when property is transferred to or from a trust if the trustee’s identity is listed on the deed.