How Do I Transfer the Title of a House?

ARTICLE SOURCE;Â AMROCK.COM

HOW DO I TRANSFER THE TITLE OF A HOUSE?

Trusted Family and Friends A quitclaim deed is often used to transfer property to trusted family and friends. Quitclaim deeds lack the title covenant of most other types of property deeds, meaning the transfer is without warranty. The property owner, the grantor, transfers the ownership of the property to the grantee, such as an immediate family member, without the protection offered by other forms of deeds. So if a title defect, encumbrance, or challenge comes up, there’s no legal recourse for the grantee.

This kind of “as-is” property transfer carries risk if the grantor isn’t sure his title is free and clear and if the grantee isn’t sure the grantor is acting in good faith. Therefore, this type of deed is generally only used in certain circumstances where such problems are less likely to occur. You may find the grantor, terminating their interest in a jointly owned marital home, and conveying that interest to the other grantee spouse. Another common use is when one family member wants to gift a piece of property to a relative, without a traditional sale.

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need to use a quitclaim deed during a divorce, in which one spouse acts as a

From You to Your LLC However, quitclaim deeds can also be used in a small business setting. An owner of a rental property or a piece of investment real estate might decide the time has come to form an LLC business entity, to limit their legal liability if someone is injured on the property or decides to sue the property owner. This is particularly common for owners of multiple rental properties, such that an owner might prefer to form an LLC for each property to protect the other assets.

From You to a Buyer in a Traditional Sale For traditional sales, a general warranty deed or special warranty deed is almost always used to transfer the title. The warranty deed guarantees the good state of the title, meaning that the grantee, the home buyer, has legal recourse against future claims to the property. This type of deed not only conveys an “interest” in the property, but promises the new title holder that he can legally purchase, possess, and enjoy the property.

Transferring the Title to Cure Defects When title defects do occur, they need to be cured. Often a deed of one type or another is involved in this process. In some cases, a quitclaim can be used to remove known defects in a title without the time and expense that comes with litigating the issue. A title established as unquestionable via quitclaim can then be transferred through a warranty deed, further clarifying ownership and chain of title of the property.

Some Final Notes for Mortgage Holders Property owners considering a transfer of a property should be particularly cautious if they are mortgage holders. A homeowner expects his mortgage to change or come to an end with a refinance or traditional sale.

However, some quitclaim grantors are unaware their mortgage will also be affected by such a transfer.

Many mortgage agreements have what’s known as a “due on sale” clause, which means the lender will “call” the loan and require full repayment. Even without an exchange of money, such as a gift quitclaim transfer between family members, a mortgage lender’s procedures could require immediate repayment of the loan balance.