Why a Quitclaim Deed Doesn't Fully Release Responsibility




When navigating the complexities of real estate transactions in Washington State, it’s vital to understand the differences between a title and a mortgage—and why filing a quitclaim deed does not absolve you from mortgage liability. This distinction is crucial to avoid financial and legal pitfalls, especially during life events such as divorce, separation, or transferring property ownership.

What Is a Quitclaim Deed?

A quitclaim deed is a legal document used to transfer ownership interest in a property from one party to another. Unlike a warranty deed, it does not guarantee that the title is free from liens or encumbrances. In Washington State, quitclaim deeds are commonly used to transfer property between family members, settle divorces, or resolve disputes. However, a quitclaim deed only affects ownership rights; it does not impact the financial obligations tied to the property—namely, the mortgage.

Title vs. Mortgage: Key Differences

The title represents legal ownership of a property. It grants the titleholder the right to sell, lease, or transfer the property. A mortgage, on the other hand, is a loan agreement between the borrower and lender, secured by the property. It represents a financial obligation to repay the borrowed amount, plus interest, over time.

Here’s where the distinction becomes critical: transferring title through a quitclaim deed does not alter or remove the mortgage. While the deed changes ownership, the mortgage remains tied to the original borrower(s). This means that even if you sign over your ownership interest, you’re still legally responsible for the mortgage unless the lender explicitly releases you from the loan.

Why Filing a Quitclaim Deed Doesn’t Remove Mortgage Liability

When you file a quitclaim deed, you are effectively relinquishing your ownership rights to the property. However, the mortgage is a separate legal agreement that isn’t automatically affected by this transfer. Mortgage lenders require repayment regardless of changes in property ownership. Unless the mortgage is refinanced or assumed by the new owner (with lender approval), you remain legally liable for the loan.

This creates potential risks. For example, if the new owner defaults on payments, the lender can pursue you for the unpaid balance. Worse, your credit score could suffer, and the lender might initiate foreclosure proceedings against the property—all while you no longer hold ownership rights.

The Importance of Understanding Liability

Failing to understand the distinction between title and mortgage can lead to unintended consequences. If you’re considering transferring property via quitclaim deed, it’s essential to:

  1. Consult a Real Estate Attorney: A qualified attorney can help you understand the legal and financial implications of transferring property ownership.
  2. Address Mortgage Liability: Speak with your lender about options such as refinancing, loan assumption, or releasing your liability. Ensure any agreements are documented in writing.
  3. Communicate Clearly: If the transfer is part of a divorce or business deal, ensure all parties understand their responsibilities regarding the mortgage and ownership.

A quitclaim deed can be a useful tool for transferring property ownership in Washington State, but it’s not a magic wand that erases financial obligations. Understanding the differences between title and mortgage—and the liability each carries—is essential for protecting yourself from future financial and legal troubles. When in doubt, seek professional guidance to ensure you make informed decisions.

As always, if I can help you buy or list a home in Tacoma or anywhere in the Puget Sound, please text or call me at (206) 643-8845 or connect with me at www.erikmolzen@bhhsnw.com


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Location: Tacoma, WA, USA

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