What is a quitclaim deed?
A quitclaim deed is a deed in which the grantor releases any interest they have in the property to the grantee without saying what that interest is or promising that it’s free of claims. If the grantor owns the whole property, the grantee gets the whole property. If the grantor owns half, or nothing, that’s what the grantee gets.
That makes a quitclaim deed a tool for clearing up ownership between people who already know the history of the property, not for buying from a stranger. It is still a real conveyance. Once signed, delivered and recorded, the interest moves, and it can carry tax, loan and title consequences just like any other deed.
Quitclaim deed vs warranty deed vs grant deed
The difference between deeds comes down to the promises the seller makes about title. A general warranty deed promises good title against everyone, back through the whole chain. A special warranty deed covers only problems created while the seller owned the property. A quitclaim deed makes no promises at all.
California and a few other states use a grant deed for most sales. Under California Civil Code section 1113, the word “grant” carries two implied promises: the seller hasn’t already conveyed the property to someone else, and it is free of encumbrances the seller created, unless the deed says otherwise.
| Deed type | What the seller promises | Typical use |
|---|---|---|
| General warranty deed | Good title against all claims, past and present | Sales in many states |
| Special warranty deed | No title problems created during the seller’s ownership | Commercial and investor sales in many states |
| Grant deed | Not conveyed to anyone else; no undisclosed encumbrances by the seller | Most sales in California |
| Quitclaim deed | Nothing; transfers only whatever interest the signer has | Transfers to an LLC, divorce, family, clearing a title cloud |
When do property owners use a quitclaim deed?
Owners use a quitclaim deed when the parties already trust each other and no one is paying full price for the property. Common situations include:
- Moving a rental or apartment building from your own name into an LLC you own.
- Divorce, when one spouse gives up their interest so the other keeps the building.
- Adding or removing a family member from title, or a gift to a child.
- Clearing a cloud on title, such as a former co-owner, an heir with a possible claim or a misspelled name.
- Releasing an interest after a tenants-in-common buyout, when the selling co-owner hands their share to the others.
Why buyers and title companies don’t use quitclaim deeds for sales
In an arm’s-length sale, a buyer paying full price wants the seller on the hook if title turns out to be bad, and a quitclaim deed takes that away. Purchase contracts for apartment buildings usually call for a warranty, special warranty or grant deed, and buyers expect an owner’s title insurance policy at closing.
A quitclaim in the chain of title can also slow a later sale. The title company may want to know why it was used and whether anyone kept a claim, and it may ask for more documents before it insures. Expect questions if a quitclaim deed was used to move a building between owners in a deal that involved real money.
So when we buy a building, the deed is a grant or warranty deed, depending on the state, backed by a title policy. Quitclaims show up mostly in cleanup work before closing, such as getting a former spouse or an heir to release an old interest.
Quitclaiming a building into an LLC: due-on-sale and title insurance
Moving a building into your LLC with a quitclaim deed can violate your mortgage, because most loans let the lender call the balance due if the property is transferred without consent. The federal Garn-St Germain Act limits that only for residential property with fewer than five dwelling units, and its list of protected transfers includes a transfer into a living trust but not into an LLC.
For a 5+ unit building, there is no federal protection at all, and multifamily and commercial loan documents usually spell out exactly which transfers need approval and what fees apply. Ask your lender or servicer for written consent before you record the deed.
Title insurance is the second trap. An owner’s policy generally protects the named insured and ends once they convey title, unless the new owner fits the policy’s definition of an insured. The 2021 ALTA owner’s policy covers some grantees, such as an entity wholly owned by the insured, but older policies and other forms vary. Ask the title company whether your policy carries over or whether you need an endorsement or a new policy.
Taxes a quitclaim deed can trigger
The type of deed doesn’t decide the tax. What matters is who ends up owning the property, whether money changed hands and what your state taxes. A quitclaim deed can trigger the same transfer tax and property tax reassessment as any other deed.
- Transfer tax: most states with a real estate transfer tax charge it on the consideration paid, whatever the deed is called, and many exempt transfers with no consideration or transfers into an entity with the same owners. Check your state’s transfer tax page.
- Property tax reassessment: in California, a change in ownership resets the Prop 13 assessed value for the part that changed hands.
- Gift tax: quitclaiming property to a child or relative for less than its value is a gift. For 2026, gifts over the $19,000 annual exclusion per recipient go on Form 709 and count against the lifetime exemption of $15,000,000.
- Income tax basis: a gift carries over the giver’s basis, while property inherited at death generally gets a stepped-up basis, which is why many owners use a transfer on death deed or trust instead of gifting a building during life.
- Divorce: under Section 1041, a transfer between spouses, or to a former spouse incident to divorce, generally isn’t taxed as a sale, and the receiving spouse takes the transferring spouse’s basis.
Worked example: a quitclaim between siblings in California
Two siblings own a 10-unit building in an unincorporated part of a California county as 50/50 tenants in common. It is free and clear, worth $4,000,000, and its total Prop 13 assessed value is $1,200,000. The sister pays her brother $2,000,000 for his half, and he signs a quitclaim deed to her.
Because the brother’s half changed ownership, Revenue and Taxation Code section 65.1 reappraises that half at market value: $2,000,000. The sister’s original half keeps its $600,000 assessed value, so the new total is $2,600,000. At the 1% Prop 13 general levy, the base tax goes from $12,000 to $26,000 a year before voter-approved bonds and special assessments.
The county documentary transfer tax of $0.55 per $500 applies to the $2,000,000 paid: 4,000 units of $500 × $0.55 = $2,200. A city tax would be added if the building were inside a city that levies one.
Compare a different move: the siblings quitclaim the building to an LLC they own 50/50. Their proportional interests don’t change, so Section 62(a)(2) excludes the transfer from reassessment and Section 11925(d) exempts it from the documentary transfer tax. They become “original co-owners,” though, and if more than 50% of the LLC interests later change hands in total, Section 64(d) reappraises the whole building.
| Line | Before | Sister buys brother’s half | Siblings move it to their LLC |
|---|---|---|---|
| Assessed value | $1,200,000 | $2,600,000 | $1,200,000 |
| Base 1% property tax | $12,000 | $26,000 | $12,000 |
| County transfer tax | None | $2,200 | $0 (exempt) |
| Who owns it | Siblings 50/50 | Sister 100% | LLC owned 50/50 |
Does a quitclaim deed remove you from the mortgage?
No. A quitclaim deed changes who owns the property, not who owes the loan. If you sign a quitclaim deed to an ex-spouse or a sibling and your name is on the note, you’re still on the hook until the loan is paid off, refinanced or the lender releases you in writing.
That matters a lot in divorce and family transfers. Ask for a refinance or a formal assumption and release as part of the deal, or your credit stays tied to a building you no longer own.
How to complete and record a quitclaim deed
A quitclaim deed has to meet your state’s rules for a recordable deed, and most of the work is in getting the details exactly right:
- Use the exact names of the grantor and grantee as they appear on title and in the LLC’s formation documents.
- Copy the full legal description from the current vesting deed, not just the street address.
- Sign in front of a notary, with witnesses if your state requires them.
- Complete the transfer tax return or exemption statement and any change-of-ownership form your county requires.
- Record the deed with the county recorder and keep the recorded copy.
- Update the insurance, the lender, the property manager, the leases and the rent deposit accounts so they match the new owner.
How this works for a 5+ unit apartment building
For a 5+ unit building, a quitclaim deed is usually a step in restructuring, not a way to sell. Owners use it to move a building into an LLC, buy out a partner or clean up title before a sale. Each of those moves touches a commercial loan with strict transfer clauses, leases and deposits that must follow the owner, and in some states a reassessment that can change your NOI and cap rate overnight.
Before recording anything, check the loan documents, the title policy and your state’s transfer tax and reassessment rules. A transfer into an LLC can also change how the property is reported for taxes, so your CPA should see it before it happens, especially if a 1031 exchange or sale is on the horizon.
Selling your building to Skyline
Skyline Capital Investments buys apartment buildings with five or more units nationwide, including buildings with messy title: old quitclaims, ex-spouses still on record, heirs who never signed and co-owners who disagree. We work with the title company to clear those issues before closing, and we can include seller-carry terms or work around a 1031 exchange timeline.
Send the address and unit count through the form on this page or call (469) 660-2977. We typically respond within 48 hours.
