A deed is a written instrument used to transfer ownership of property from one individual to another. When property is given as a gift, the two types of deeds most commonly used are gift deeds and quitclaim deeds. The deed must be signed, notarized and witnessed by two parties who have no ownership interest in the property and filed at the recorder's office in the Virginia county where the property is located.
A gift deed is the most common type of document used to give someone ownership of real property as a gift. This type of deed is used when the transfer is not made in a monetary exchange. Gift deeds are typically used when property is transferred between friends and relatives. Even though money isn't exchanged, there is value to the gift. Gift deeds are irrevocable once given to recipients and may have tax consequences.
Gift Deed Restrictions
The main disadvantage of transferring ownership of property using a gift deed is that the donor is still financially responsible for all property debts, including loans, liens and mortgages. Also, the state of Virginia does not define whether the donor or recipient is responsible for settling unforeseen claims made against the property after the transfer.
A quitclaim deed, also known as a "deed of release," is a legal document used when someone wants to relinquish ownership or interest in real property. It is used to transfer jointly owned property to just one of the co-owners. It is frequently used when family members or divorcing spouses exchange property rights between each other without compensation. Quitclaim deeds must be signed by each co-owner and notarized by a Virginia notary.
Quitclaim Deed Restrictions
Although quitclaim deeds transfer the co-ownership of property to a sole owner, it does not relieve the grantor from any existing financial responsibilities or encumbrance on the property such as mortgage payments or tax liens. Additionally, if the property is owned by a third party, the quitclaim deed only removes the ownership rights of the grantor and all other owners still have claim on the property.