Extension releases MontGuide on quitclaim deeds

Montana State University Extension has released the MontGuide “Quitclaim Deeds in Montana.” According to Marsha Goetting, family economics specialist, a quitclaim deed is a legal form that allows an owner to transfer real property, like land or buildings, to a grantee, who then holds the title to the property.

The grantee of a quitclaim deed accepts the risk of any known or unknown problems with the real property, Goetting cautioned. Unknown claims against the property could include a defect in a title, collection liens, missing heirs, unknown easements, survey disputes or a previous mortgage. An owner may have placed restrictions on the use of the property, commonly called covenants. Or a former owner may have established rules against parking a recreational vehicle in a driveway or having a car on blocks for a repair job on the lawn.

A quitclaim deed can be more complicated if the real property has multiple owners, said Jane Wolery, co-author of the guide and Extension agent for Teton County. She added the two most common ways to hold a title to real property are the arrangements called “tenants in common” and “joint tenancy with right of survivorship."

Using a quitclaim deed to grant real property to more than one grantee creates a tenants in common arrangement, unless the quitclaim deed clearly states otherwise. That means two or more people each own a portion of the total value of the real property — which is also called having an “undivided interest," Goetting and Wolery explained. If there are two grantees on the quitclaim deed, their undivided interest is 50% each; if there are four grantees, it’s 25% each. There is no right of survivorship in this arrangement, meaning that if one owner dies, the other co-owners do not automatically inherit their interest in the property.

“When title to real property is tenants in common, all co-tenants have equal rights to manage and live on the property,” Goetting said. “Each tenant in common has the right to transfer their share of the real property by sale or gift. When a tenant in common dies, the deceased’s interest in the real property passes to the deceased’s heirs. This assumes the deceased died without a will. If the deceased had a written will, the property passes to their devisees, or beneficiaries.”

Instead of holding property as tenants in common, Goetting and Wolery said multiple grantees may specify to the grantor of a quitclaim deed that they want the title to appear as a joint tenancy with right of survivorship. This means that if one of the joint tenants dies, the surviving tenants become owners of that tenant’s share of the property.

“For example, if there were three joint tenants and one joint tenant died, the two survivors own 50% each,” Goetting said. “A joint tenancy with right of survivorship also avoids probate, unlike holding the property as a tenant in common.”

Wolery said the grantors must sign a quitclaim deed and acknowledge it before a notary. The grantees submit the deed for recording in the clerk and recorder’s office in the county where the property is located.

“Quitclaim Deeds in Montana” can be found at https://store.msuextension.org/publications/FamilyFinancialManagement/MT202102HR.pdf. Paper copies are available at Extension and reservation offices.