Florida Quit Claim Deed

Definition of Quit Claim Deed

A quitclaim deed is the simplest way to transfer an interest in real property in Florida. This type of deed is often used between parties that have an existing relationship, such as family members, divorcing spouses, or business partners.

A key feature of a quitclaim deed is that it does not guarantee a property's title is free of liens. The grantor simply transfers whatever interest they have in the property to the grantee and no title search is performed. Therefore, the grantee receives whatever interest the grantor has at the time of the transfer, which could be nothing at all.

For this reason, quitclaim deeds are not typically used in arm's length real estate purchases. Instead, a title search is performed and the seller then executes a warranty deed, in which he guarantees clear title to the buyer.

Requirements for a Quit Claim Deed

To be valid in Florida, a quitclaim deed must meet certain requirements:

1. Wording of the Deed: The deed must identify the property being conveyed, the grantor (the person transferring the property), and the grantee (the person receiving the property). It should include a clear legal description of the property, not just a street address.

2. Formalities:

   • The grantor must sign the deed in the presence of two disinterested witnesses.
   • The deed must also be notarized with the notary's stamp and signature. The notary can also act as a witness.
   • Consideration (the amount paid for the property, even if nominal) must be stated on the deed, though the grantee does not need to sign the document.

3. Delivery of the Deed: The deed must be delivered to the grantee to be effective. Physical delivery, along with the intent to transfer ownership, is key to completing the transfer.

4. Recording of the Deed: Recording the deed with the clerk of court in the county where the property is located is highly recommended, though not required. Recording gives public notice of the change in ownership.

Florida Quit Claim Deed Statutes:

• Section 689.025, Florida Statutes prescribes the specific language that should appear in a quitclaim deed.

• Section 689.01, Florida Statutes requires that deeds conveying real property be signed by the grantor in the presence of two witnesses.

When Does the Deed Become Effective?

A quitclaim deed becomes effective upon delivery to the grantee, meaning the grantor has physically or constructively delivered the deed with the intention of transferring ownership. However, while the deed is effective once delivered, recording the deed with the county clerk is critical for protecting the grantee's interest.

Without recording the deed, the grantee may face difficulties in obtaining a mortgage or selling the property. Recording ensures that third parties, such as creditors or potential buyers, are aware of the ownership transfer.

How to Record a Quitclaim Deed

To record a quitclaim deed, the original signed and notarized document must be taken to the clerk of court in the county where the property is located. The clerk will charge a small fee for recording the deed, which varies by county. The deed then gets recorded in the chain of title for the property, letting the public know that a change in ownership has occurred.

If there is a mortgage on the property, a documentary stamp tax will usually be assessed on the transfer. Florida's documentary tax on mortgages is currently $0.35 per $100 of the mortgage amount. This tax must be paid when recording the deed.

Quitclaim Deed After Divorce

In divorce proceedings, quitclaim deeds are often used to transfer one spouse's interest in the marital home to the other spouse. Its important to note that a quit claim deed transfer does not affect any mortgage obligations tied to the property.

If both spouses are jointly liable on the mortgage, both remain liable even after the transfer. To fully release a spouse from the mortgage, refinancing or other arrangements with the lender must be made.

Be mindful that many mortgages contain a "due on sale" clause, which may allow the lender to call the loan due upon transfer of ownership. However, in practice, lenders rarely enforce this clause unless the mortgage is in default.

Quitclaim Deed in Estate Planning

Quitclaim deeds can be a useful tool in estate planning. For example, a property owner can transfer their real estate to a living trust using a quitclaim deed. This allows the property to be held in trust for the benefit of beneficiaries and avoids probate upon the grantor's death.

Additionally, quitclaim deeds can be used to transfer property into a Florida LLC as part of an asset protection strategy. The owner may then devise their LLC interest to heirs through an operating agreement, keeping the property within the family while potentially shielding it from creditors.