Quit Claim Vs. Warranty Deed
Real estate is transferred by deeds, but there are several types of deeds, including quit claim and warranty deeds. With a quit claim deed, the Michigan property owner transfers his ownership rights, if any, to the new owner but does not promise that he actually has any ownership rights. The spouse giving the deed, called the grantor, is not promising that there are no liens or restrictions against the property, and a title search is not necessary for a quit claim deed. With a warranty deed, the property owner promises, or warrants, that he owns the property without restrictions not listed in the deed. Typically, spouses make divorce-related transfers with a quit claim deed.
At the end of the divorce process, a Michigan court issues a divorce decree listing the terms of the divorce, including how the couple's property is to be divided. The divorcing couple can reach an agreement on how to split their property, which the court includes in the decree, or they can let the judge decide how to divide their assets. Either way, the divorce decree is a legal order with which the spouses must comply. If the decree says one spouse must transfer her rights in the house to the other via quit claim deed, the transferring spouse must follow that order.
Impact on Mortgage
Although a spouse's ownership rights transfer by a quit claim deed, her mortgage obligations do not. A mortgage loan is a separate document and follows a separate process to get one spouse's name off the loan. Thus, when a Michigan spouse transfers her property rights by signing a deed, she does not automatically relieve her obligation to repay the loan. Instead, if the divorce decree allows the transferring spouse to wait, she can sign the quit claim deed when her spouse gets the mortgage placed in his own name. The mortgage documents and quit claim deed can be signed at the same time, often at a mortgage closing.
Creating and Recording a Deed
In Michigan, a quit claim deed identifies the name and address of the transferring spouse as well as the spouse who is keeping the home. It also gives the legal description of the property being transferred, such as the lot number of the home. It must be signed and notarized to be effective. Once the deed is complete, it must be recorded with the Register of Deeds office in the county where the property sits. Recording can be done by mail or in person, and the document cannot be filed until a small registration fee is paid.