I am a member of the State Bar of California, the U.S. District Court for the Central District of California, and a licensed California real estate broker. Please permit me to assist. You asked:
I) Such notarized a) contract and b) quitclaim with be valid in case of a divorce so son in law neither daughter will have any claim against subject property?
A: If daughter quitclaims her interest in the property to mother, after the loan is funded, then daughter will remain liable for the loan, but will have no legal interest in the property -- because the quitclaim operates to relinquish all rights in the property that daughter has at the time the quitclaim is signed.
As for son-in-law, if he is not on title before the loan, then he has no interest to quitclaim. However, by signing the quitclaim, he will release any rights to the property that he could potentially claim (legally termed, "equitable interest"). However, in order to ensure that son-in-law cannot claim an equitable interest at dissolution of marriage, he must sign a waiver agreement. This is a very specific statement that is unique to California law -- and it requires equally specific procedures which must be followed. Otherwise, the waiver will be deemed invalid and unenforceable.
II) does quitclaim deed and contract need to be registered at public records to be valid? or can mother keep in safe box in case needed in the future?
A: The quitclaim must be recorded with the county clerk in order to provide valid notice to third parties, and to avoid any intervening liens which may be recorded. While this is not strictly required, it's a very bad idea to fail to record a deed. If the deed is lost or destroyed, then without the recording there will be no proof that the deed was ever signed.
I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.
Thanks again for using Justanswer!