When real estate is sold or given away, it's usually done with a deed. Deeds are the written documents that transfer ownership from a "grantor" to a "grantee." Grant deeds and warranty deeds both make guarantees that the grantor has a legitimate title to the property. A quitclaim deed makes no such promises.
A quitclaim deed, like other deeds, can only transfer title if it's in the correct legal form. The requirements, the Nolo legal website states, include the names of the grantor and grantee, a legal description of the property and the grantor's signature. If the written document is in order, a quitclaim deed will pass the title.
A grantor using a special warranty deed is offering a guarantee that he has done nothing to impair the grantee's title, such as selling the title to another person as well. A general warranty deed, Nolo states, guarantees that there's no "cloud" on the title from previous owners either; a grant deed makes similar guarantees, but not as explicitly. A quitclaim deed doesn't even guarantee that the grantor has title to the land, only that whatever ownership she does have is transferred to the grantee.
The effect of using a quitclaim deed is that there's no certainty the grantee's title is valid, the U.S. Legal website states. If there is a cloud on the title, the grantee has no legal recourse against the grantor, whereas a grantor using a warranty or grant deed could be legally liable if the title is bad.
There are times a quitclaim deed works perfectly well, the Real Estate Lawyers website states. Quitclaim deeds are often used to transfer title between family members, where there's less worry about being defrauded; for a divorcing spouse to give up any title she might have to property she and her husband owned together; or for the grantor to transfer property into a living trust. Quitclaim deeds may also be used to eliminate clouds on a title: If someone with a disputed claim signs a quitclaim deed, that resolves any ownership rights he might have without the need to first establish if he had any.
If the government forecloses on property for unpaid taxes, then sells it at auction, it will transfer title to the top bidder by a quitclaim deed. That leaves the government free of any obligation if the title is clouded. Anyone bidding on the property should do so knowing that their title could be challenged down the road.