How Do Two People Add a Third Person to the Deed if There Are Two Mortgages on the Property?

03/24/2010 - Category:Real Property - Deeds - State: CA #21529

Full Question:

Regarding property located in Canton, GA that has a Husband and Wife on the title with a first and second mortgage. How can I and an individual be added as a third position?

Answer:

A deed is the written document which transfers title (ownership) or an interest in real property to another person. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee) and be signed and notarized by the grantor. In addition to the signature of the grantor(s), deeds must be acknowledged to be recorded and acceptable as evidence of ownership without other proof. A valid deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the county recorder or recorder of deeds in the county in which the real estate is located.

There are many situations in which it may be desirable to add or delete a person's name from a deed, such as adding or removing a spouse, child or sibling. A person can only be deleted from a deed with their approval, i.e., they must execute the deed (sign and have their signature notarized). When a couple solely own a home as joint tenants, one spouse may deliver a deed to the other, such as a deed from husband and wife to an individual, or a deed from two individuals to one individual.

There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record. However, a person who obtains a mortgage is still liable for mortgage payments after executing a quit claim deed on the property securing the mortgage. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title.

Joint tenancy is a form of ownership by two or more individuals together. It differs from other types of co-ownership in that the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant. State law, which varies by state, controls the creation of a joint tenancy in both real and personal property. Joint tenancy property passes outside of probate, however, it may be severed so that the property becomes part of one person's estate and passes to that person's heirs. A joint tenancy between a husband and wife is sometimes known as a tenancy by the entirety. Tenancy by the entirety has some characteristics different than other joint tenancies, such as the inability of one joint tenant to sever the ownership and differences in tax treatment. In some jurisdictions, to create a tenancy by the entirety the parties must specify in the deed that the property is being conveyed to the couple "as tenants by the entirety," while in others, a conveyance to a married couple is presumed to create a tenancy by the entirety unless the deed specifies otherwise. Each joint tenant has an equal, undivided interest in the whole property. All joint tenants, and their spouses, must sign deeds and contracts to transfer or sell real estate. A joint tenant may convey his or her interest to a third party, depending on applicable state law. This conversion would in effect terminate the joint tenancy and create a tenancy in common.

Joint tenancy comes into being, or is created, by a specific act of the parties involved. For example, real estate held in this fashion is typically the result of a property transfer by deed. Each joint tenant owns an equal share of co-owned property. When the first joint-tenant dies, the title designation transfers the property immediately and automatically to the surviving joint tenant. This ownership arrangement is said to be a will substitute because it eliminates probate of this particular asset. Avoiding probate does not mean the property will not be included in the taxable estate of the first co-owner to die, or that state and a federal gift and estate taxes will be avoided. Estate planning experts feel joint tenancy is a poor method of planning property transfer for two reasons. First, each co-owner has given up the right to leave the property to anyone other than the other co-owner. Circumstances may change and either tenant may later want to leave the asset to someone else. Either party can usually dissolve a joint tenancy during life, but this may not always be possible or practical. Second, where taxes are an important consideration in planning an estate, holding assets in joint tenancy does not permit one joint tenant to leave their share of the assets in such a way as to save taxes. Upon the death of the first joint tenant, the asset goes outright to the survivor. This causes the survivor’s taxable income and taxable estate to be increased. Careful consideration should be given to the tax consequences of dissolving existing joint tenancies because additional gift and estate tax obligations may be created. Tax implications should be fully explored with tax experts before changes are made and, particularly, before new joint tenancies are created.

Joint tenancy with the right of survivorship reflects the desire of many husbands and wives to hold title to property in a way that the survivorship characteristic prevails. When either dies, they each want the surviving spouse to acquire full ownership in the property and to do so with a minimum of time, trouble, and red tape. Thus, they take or hold title to property as “Joint Tenants and to the Survivor.”

Tenancy in common is another form of co-ownership of property that can exist between any two or more persons. Tenancy in common can be created by deed, will, or by law. Tenants in common, like joint tenants, must act together to decide how they are going to enjoy and use the property. Problems about the management and improvement of the property, and how the income stream is to be divided, can exist. A distinguishing characteristic is that there is no right of survivorship. Each tenant can dispose of their separate and distinct, yet undesignated, interest in the property in any way they choose. Each co-owner can sell it or give it away. They can direct its eventual disposition by last will and testament, or they can ignore the problem. Each co-owner’s property will be distributed, when they die, according to the law of property descent and distribution. Several of the more important characteristics of a tenancy in common are:


1. Each tenant in common has the power to dispose of their separate and distinct, yet undesignated interest, in whatever property is involved, any way they choose.


2. When a co-owner dies, their interest does not pass to the surviving tenant-in-common. It passes to the surviving co-owner spouse, or to some other person or party, but only if the property owner so indicates his wishes in his last will and testament. Otherwise, the property passes according to the law of property descent and distribution.


3. When a co-owner dies, any property owned in this fashion becomes a part of the probate estate, and passes under the supervision of probate court.


4. Only the partial interest owned by the property owner is included in his estate. Hence, only the partial interest owned by him is subject to state and federal estate taxes.

Tenants in common hold title to real or personal property so that each has an "undivided interest" in the property and all have an equal right to use the property. Tenants in common each own a portion of the property, which may be unequal, but have the right to possess the entire property. There is no "right of survivorship" if one of the tenants in common dies, and each interest may be separately sold, mortgaged or willed to another. A tenancy in common interest is distinguished from a joint tenancy interest, which passes automatically to the survivor. Upon the death of a tenant in common there must be a court supervised administration of the estate of the deceased to transfer the interest in the tenancy in common.

In the case of a life tenant who holds a life estate, when the life tenant dies, their interest may pass to the remaindermen. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion."

A deed is the written document which transfers title (ownership) or an interest in real property to another person. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee) and be signed and notarized by the grantor. In addition to the signature of the grantor(s), deeds must be acknowledged to be recorded and acceptable as evidence of ownership without other proof. A valid deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the county recorder or recorder of deeds in the county in which the real estate is located.

There are many situations in which it may be desirable to add or delete a person's name from a deed, such as adding or removing a spouse, child or sibling. A person can only be deleted from a deed with their approval, i.e., they must execute the deed (sign and have their signature notarized). When a couple solely own a home as joint tenants, one spouse may deliver a deed to the other, such as a deed from husband and wife to an individual, or a deed from two individuals to one individual.

There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record. However, a person who obtains a mortgage is still liable for mortgage payments after executing a quit claim deed on the property securing the mortgage. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title.

Joint tenancy is a form of ownership by two or more individuals together. It differs from other types of co-ownership in that the surviving joint tenant immediately becomes the owner of the whole property upon the death of the other joint tenant. State law, which varies by state, controls the creation of a joint tenancy in both real and personal property. Joint tenancy property passes outside of probate, however, it may be severed so that the property becomes part of one person's estate and passes to that person's heirs. A joint tenancy between a husband and wife is sometimes known as a tenancy by the entirety. Tenancy by the entirety has some characteristics different than other joint tenancies, such as the inability of one joint tenant to sever the ownership and differences in tax treatment. In some jurisdictions, to create a tenancy by the entirety the parties must specify in the deed that the property is being conveyed to the couple "as tenants by the entirety," while in others, a conveyance to a married couple is presumed to create a tenancy by the entirety unless the deed specifies otherwise. Each joint tenant has an equal, undivided interest in the whole property. All joint tenants, and their spouses, must sign deeds and contracts to transfer or sell real estate. A joint tenant may convey his or her interest to a third party, depending on applicable state law. This conversion would in effect terminate the joint tenancy and create a tenancy in common.

Joint tenancy comes into being, or is created, by a specific act of the parties involved. For example, real estate held in this fashion is typically the result of a property transfer by deed. Each joint tenant owns an equal share of co-owned property. When the first joint-tenant dies, the title designation transfers the property immediately and automatically to the surviving joint tenant. This ownership arrangement is said to be a will substitute because it eliminates probate of this particular asset. Avoiding probate does not mean the property will not be included in the taxable estate of the first co-owner to die, or that state and a federal gift and estate taxes will be avoided. Estate planning experts feel joint tenancy is a poor method of planning property transfer for two reasons. First, each co-owner has given up the right to leave the property to anyone other than the other co-owner. Circumstances may change and either tenant may later want to leave the asset to someone else. Either party can usually dissolve a joint tenancy during life, but this may not always be possible or practical. Second, where taxes are an important consideration in planning an estate, holding assets in joint tenancy does not permit one joint tenant to leave their share of the assets in such a way as to save taxes. Upon the death of the first joint tenant, the asset goes outright to the survivor. This causes the survivor’s taxable income and taxable estate to be increased. Careful consideration should be given to the tax consequences of dissolving existing joint tenancies because additional gift and estate tax obligations may be created. Tax implications should be fully explored with tax experts before changes are made and, particularly, before new joint tenancies are created.

Joint tenancy with the right of survivorship reflects the desire of many husbands and wives to hold title to property in a way that the survivorship characteristic prevails. When either dies, they each want the surviving spouse to acquire full ownership in the property and to do so with a minimum of time, trouble, and red tape. Thus, they take or hold title to property as “Joint Tenants and to the Survivor.”

Tenancy in common is another form of co-ownership of property that can exist between any two or more persons. Tenancy in common can be created by deed, will, or by law.

Tenants in common, like joint tenants, must act together to decide how they are going to enjoy and use the property. Problems about the management and improvement of the property, and how the income stream is to be divided, can exist. A distinguishing characteristic is that there is no right of survivorship. Each tenant can dispose of their separate and distinct, yet undesignated, interest in the property in any way they choose.

Each co-owner can sell it or give it away. They can direct its eventual disposition by last will and testament, or they can ignore the problem. Each co-owner’s property will be distributed, when they die, according to the law of property descent and distribution. Several of the more important characteristics of a tenancy in common are:


1. Each tenant in common has the power to dispose of their separate and distinct, yet undesignated interest, in whatever property is involved, any way they choose.


2. When a co-owner dies, their interest does not pass to the surviving tenant-in-common. It passes to the surviving co-owner spouse, or to some other person or party, but only if the property owner so indicates his wishes in his last will and testament. Otherwise, the property passes according to the law of property descent and distribution.


3. When a co-owner dies, any property owned in this fashion becomes a part of the probate estate, and passes under the supervision of probate court.


4. Only the partial interest owned by the property owner is included in his estate. Hence, only the partial interest owned by him is subject to state and federal estate taxes.

Tenants in common hold title to real or personal property so that each has an "undivided interest" in the property and all have an equal right to use the property. Tenants in common each own a portion of the property, which may be unequal, but have the right to possess the entire property. There is no "right of survivorship" if one of the tenants in common dies, and each interest may be separately sold, mortgaged or willed to another. A tenancy in common interest is distinguished from a joint tenancy interest, which passes automatically to the survivor. Upon the death of a tenant in common there must be a court supervised administration of the estate of the deceased to transfer the interest in the tenancy in common.

In the case of a life tenant who holds a life estate, when the life tenant dies, their interest may pass to the remaindermen. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion."

It may be necessary to refinance the property. If there is a mortgage on the property, the contract may violate a due-on-sale clause in the mortgage which the lender may or may not seek to enforce. Most lenders require that the mortgage or deed of trust contain a due on sale clause. This is an acceleration clause in a loan, calling for payment of the entire principal balance in full, triggered by the transfer or sale of a property. Such a clause permits a secured mortgage lender (federal, state or private) to call the entire unpaid loan balance due and payable immediately if the property securing the loan is sold, transferred, traded, gifted or otherwise disposed of without the lender’s prior written consent.



Please see the information at the following links:

http://definitions.uslegal.com/t/tenants-in-common/
http://definitions.uslegal.com/j/joint-tenancy/
http://definitions.uslegal.com/r/real-estate-deeds/
http://definitions.uslegal.com/a/acceleration-clause/
http://definitions.uslegal.com/a/assumable-mortgage/

Please see the forms at the following links:

http://www.uslegalforms.com/ca/CA-SDEED-8-14.htm
http://www.uslegalforms.com/ca/CA-SDEED-8-11.htm
http://www.uslegalforms.com/ca/CA-SDEED-8-5.htm
http://www.uslegalforms.com/deedforms/california-deed-forms.htm

03/24/2010 - Category: Deeds - State: CA #21529

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