North Carolina Quit Claim Deed Rules Explained
What is a Quit Claim Deed?
A quit claim deed is a legal document that transfers interest from one party to another. The deed "quits" the grantor of any claim to the property specified in the deed. In other words, a quit claim deed is used to transfer the existing interest held by the seller in certain property to another party, usually, but not necessarily, a buyer of the property in question. For example, if Smith is a joint owner of certain land and wishes to sell his interest in this land to Jones, he would simply sign a quit claim deed granting his ownership interest to Jones. Smith would not be transferring to Jones any title to the property or by way of the deed transferring title to the property in Jones but if Jones accepted the deed, then Smith would no longer hold any ownership interest in the property. Smith is not making any warranty that the property is free and clear of any judgment or lien or that Jones won’t have it taken away later. In these respects, a quit claim deed is different than a warranty deed usually used to transfer title between arms-length parties. A quit claim deed may be used in an arms-length transaction, however.
Typically, quit claim deeds are used to change the form of ownership of real property among family member or others with a close pre-existing arrangement. In this situation, the grantor does not usually expect to get any consideration in exchange for giving up his or her interest in the property. Rather , the quiet claim deed will usually be simply a way to remove someone from the chain of title. Quit claim deeds are often used to remove interests of spouses or former spouses who are getting divorced but sometimes a quit claim deed will be executed in a business context to make family members owners of family owned property as joint tenants with rights of survivorship or to take over an interest in property of an LLC that has become defunct or collapsed. Such a deed is not a "quit claim" in the sense of getting rid of the claim itself of the LLC or the spouse but to transfer the interest of the LLC or the spouse to the owners of the LLC or to the ex-spouse so that the ex-spouse or the owner of the LLC will not be bothered by the claims anymore. In addition to the situation where the claim is left intact because it does not show up on the face of the deed and is transferred to another owner by quit claim deed, a quit claim deed can be part of a broader plan to eliminate, extinguish, or reduce the claim itself by changing its form. If the person who held the claim no longer owns the same under any circumstances, the claim itself or at least its non-ownership status may be removed through a quit claim deed. If there is also a deed of trust encumbering the property, the claim might be extinguished through a deed of deed of foreclosure rather than a quit claim deed.
Required Elements of a Quit Claim Deed in North Carolina
A North Carolina Quit Claim Deed must be signed by all persons that are owners of a particular property. Almost all of the time, that includes all persons that are on the deed. If property is held by two (or more) owners as Joint Tenants or Tenants in Common, both owners must sign. This includes foreclosures, distributions from estates, transfers between spouses, and transfers between family members. Additional persons, such as spouses, creditors, or other parties that have a legal interest in the property, also need to sign when applicable. An example of this is a foreclosure deed of property where the property was owned by a single person. While the foreclosing lender will typically sign and appears on the foreclosure deed, the original owner is not required to sign in to convey the property upon completion of the foreclosure. In this case, the current owner (foreclosed on) will not be required to sign in the foreclosure deed. However, with a divorce, if the property acquired during the marriage was in the name of both spouses, once the final divorce order is received, both spouses will need to sign in the Quit Claim Deed, even if one spouse would be entitled to the property in equitable distribution. Given the fact that a Quit Claim Deed is an instrument of transfer, it is required that before filing, the instrument be properly typed and must give all of the following: Additionally, the property being conveyed in the Quit Claim Deed must be properly and completely referenced in the instrument. Whether or not the property is recorded, there are specific legal descriptions as outlined in the statutes that must be included in a Quit Claim Deed. This includes any including specifications that might be part of the deed described; a deed must also describe the property as close as possible to the description used in the original deed to the property. In North Carolina, the individual who signs a Quit Claim Deed as a witness must be a registered Notary Public. Upon proper execution, Quit Claim Deeds must be filed with the Register of Deeds in the county where the property is located after which, the new owners will have an official public record of ownership for the property.
Filing and Recording a Quit Claim Deed
In North Carolina, a quit claim deed is filed with the Register of Deeds in the county where the real property (land and any structures on the land) is located. There are fees associated with filing the quit claim deed; these fees are set by the local Register of Deeds office. There is also often a recording tax that is due at the time of recording. Be sure to consult the Register of Deeds where the property is located to find out which fees are applicable. If payment is not remitted at the time the deed is filed, then the deed will not be recorded and will be deemed "void" from the date of its execution.
Once the quit claim deed is recorded, the Register of Deeds will stamp the deed showing the date and time of recording. The recording provides notice to the public that the grantor has transferred his/her interest in the land to the grantee. It is a good idea for the grantee to have his/her copy of the quit claim deed stamped just as the copy retained by the grantor should be. Upon request, the Register of Deeds office can furnish certified copies of the recorded quit claim deed. Depending upon the specific Register of Deeds office, there may be additional fees associated with obtaining a certified copy.
There is no time limit for filing a quit claim deed. However, if the quit claim deed is being used to clear up a defect in title, any parties who were involved in the transfer of the property should be available to sign the quit claim deed as soon as possible after the defect becomes known.
Quit Claim Deeds can serve many purposes
As noted above, one of the most common uses of a North Carolina quit claim deed is to transfer property between family members. Parents often quit claim property to adult children as a way of transferring ownership without going through the cost and formality of a probate or trust process. Couples in second marriages might find it advisable to quit claim property they own together into one name, usually that of the less wealthy spouse. But transferring title does not affect a mortgage , so a refinance on the property will likely be necessary regardless of the method used to transfer.
A second common use of a quit claim deed is to remove a former spouse’s name from property titled as husband and wife after a divorce. During the division of assets as part of the divorce proceedings, the parties may agree that one party will retain ownership of the family home. That person must then refinance the mortgage and quit claim any former joint owners from title. The quit claim portion is likely to be accepted by the mortgage lender, but the new borrower will have to qualify for a new mortgage on his or her income alone in order to be rid of the obligation of the other party who may not be able to continue making payments.
Risks of using a Quit Claim Deed
The biggest disadvantage to a quit claim deed in North Carolina is that it does not carry with it any of the title guarantees that are normally required in most real property transactions. There is no express or implied warranty, and the parties are essentially left to their own devices to determine what is actually being conveyed or reserved. Another primary concern for quit claim deeds in North Carolina is the potential for misunderstanding among the parties as to what is or is not being conveyed. As addressed above, the language in a quit claim deed is often very abbreviated, which can lead to misunderstandings. Because a quit claim deed does not contain a metes and bounds description, the parties will likely have to rely on surveyors to provide this information.
In addition, because no title insurance or abstracts are provided in a quit claim deed, this type of conveyance is often viewed as not sufficient for any type of financial transaction, such as obtaining a mortgage or home equity line of credit. While a quit claim deed may be adequate for a divorce judgment, estate administration or other family transactions, it is probably not the best form to use for the purpose of purchasing and selling real property in normal transactions.
The actual delivery of the quit claim deed requires a signature by the conveying party(s) before the deed can be registered. Like all other deeds evidencing a transfer of real property in North Carolina, a quit claim deed must be recorded at the county Register of Deeds office in order to take effect, rather than by the date of execution and delivery only. A quit claim deed is usually sufficient to convey an interest in only a part of a property, such as when one spouse quits claims their interest in the marital property to the other spouse as part of a settlement agreement in a divorce matter. When a quit claim deed is used to convey an entire property, the parties to the transaction should be aware of the limits of this type of instrument.
When to seek legal advice
Due to the importance of determining your own property rights upon receipt of an otherwise valid quit claim deed in NC, it is strongly advisable that you seek the assistance of an experienced real estate attorney for all quit claim deed matters. Your lawyer will have the experience and understanding of the issues and peculiarities involved to ensure that you properly address the relevant issues and protect your property rights.
In this age of the internet, you can easily find potential attorneys to assist you in preparing a quit claim deed or dealing with other real estate issues, by searching "real estate attorney North Carolina" or by searching specifically for an attorney in the county within which you reside. You can find bar association websites , legal directories and avvo.com in your search. While each of these may provide some or even all of the information you may need, you should contact the attorney’s office directly to confirm that its practice areas include your issue and that you can afford the services you wish to engage. Even though many people believe that they can effectively prepare their own legal documents with a little online research, this is rarely the case in real estate matters. There are many potential pitfalls, and relatively inexpensive mistakes, that can lead to headaches and other problems going forward.