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Can you use a “quit claim” deed to handle the house in a divorce?

On Behalf of | Jan 12, 2023 | Residential Real Estate |

You and your spouse are splitting up, and you’re ready to move on.  Maybe you just don’t care to fight about any possessions, so when your spouse said they wanted the house, you were glad to let them have it.  You’d rather not be tied down.  Maybe you were happy to trade your equity in the house for something you wanted more – like your boat or a collection you’ve amassed.

Can you just use a quit claim deed to settle the issue?  Here’s what you need to know:

Quit claim deeds may not accomplish what you think

Quit claim deeds take your name off the title of the property, but they don’t affect your obligation under any mortgage or loan secured by the property.  All they do is give your ex-spouse sole ownership rights over the property, which means they can do whatever they want with it without your consent.

In other words, you can relinquish your ownership rights using a quit claim deed very fast – but you could still be on the hook for payment of the mortgage or a home equity loan if your name is on those things and your ex-spouse stops paying.

This is true even if your divorce agreement officially releases you from those obligations.  (The divorce agreement only applies to the parties involved – you and your ex-spouse – and has no authority over third parties, like the bank holding your mortgage).  Since the bank has an interest in being able to secure payment, they’re unlikely to let you off the financial hook just because you ask.

Typically, before you agree to surrender the property to your ex-spouse, you should have a frank discussion about whether or not they can afford to refinance the house into their own name.  It may also require a consultation with the lender you have, or maybe an alternative lender who is willing to work with your ex-spouse’s financial and credit situation.

Divorce can get very complicated, especially when there are real estate issues involved.  Experienced legal guidance can help you avoid serious mistakes.

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