The law has certain requirements that you must follow in order to transfer ownership of real estate from one person to another.
Ilyce Glink and Samuel Tamkin
Q: I was approved for a home loan, found a home and was ready to buy it. My son was one year into his army career, but didn’t have great credit. He heard about a plan for first-time homebuyers and applied for a loan in his name. He closed on the home I was going to buy.
We paid about $200,000 for the home and made around $25,000 of improvements to the home. I paid for the down payment for the home, the home improvements, the monthly mortgage, insurance, homeowners association and real estate tax payments. He lived in the house for five years and then moved out. He added me to the title to the home at that time and a year later gifted me the home and signed a paper showing that I had paid for the home improvements, the monthly payments and all the housing expenses.
He got married and he and his wife signed a document indicating that they had no interest in the home. Six years later, he and his wife moved into the home and they started making the payments on the home and paid me $20,000 as a down payment on the more than $50,000 he owed me. He and his wife lived in the home for eight years when he died.
In that time, the value of the home tripled but now a judge said that his wife only owes me $20,000 and took me off the title to the home. That seems unfair and wrong. What can I do?
A: We’re sorry for the loss of your son. Sometimes grief exacerbates issues that would, in other circumstances, be just about money.
Your question is complicated and we suspect that the facts of your ownership of the home may not follow the paperwork. Sometimes people think that by simply writing things down, their written word will be sufficient and they won’t need anything else to prove ownership.
You mentioned that you were approved for a loan but your son decided to buy the home due to his military status and his ability to obtain a mortgage benefit as a first-time homebuyer. We suspect that when your son closed on the home, he was the only person on the title to the property.
Later, you and your son made improvements to the home and you gave him the money to pay for those improvements. More on that in a moment.
It’s unclear from your letter how or if your name was actually put on the title to the home. Once your son closed on the purchase of the home and was the sole owner of the home; he would have had to sign legal documents to put you on the title to the home.
Later, you say that you were the sole owner of the home and your son and his wife signed something that stated they had no interest in the home. They signed something, but we suspect that they didn’t sign the kind of document that would have relinquished all of their rights to the home.
We don’t have sufficient space to go through all the details. But, for you to have had the sole ownership of the home, your son should have conveyed his ownership to you by some form of a deed. It could have been a quitclaim deed or warranty deed, or perhaps some other sort of deed. This deed would have been signed by your son and recorded or filed in the office that handles real estate recordings or filings in the state in which the property is located. That filing would have put the world on notice that ownership in the property had changed.
It’s important to note that once your son was married, and he and his wife lived in the home as their primary residence, his wife should have also signed that deed. His wife would have needed to sign the deed to waive any rights she might have in the home as a spouse.
If any of these steps were not taken correctly, it’s possible that your son remained the only owner of the home from the start. It’s possible that you might never have been the legal title owner to the home, even if you paid for the entire home and all of the upgrades.
It would be unusual for a judge to simply take you off the title to the home if you were the legal owner of the home. We suspect that the judge may have found that the paperwork surrounding the transfer of ownership was faulty. Still, he clearly found that you were owed some money on top of the money you already received in repayment.
We assume you worked with an attorney and hope your attorney explained why you got this result in the end. The law has certain requirements that you must follow in order to transfer ownership of real estate from one person to another.
To our readers: You need to understand that just because you write something down on paper (whether it’s a clean sheet of paper or the back of a napkin) it doesn’t mean that document is legally binding. If you want to transfer ownership of a piece of property, hire an attorney to assist you in preparing the right documents correctly, and then filing them appropriately. That way, what you want gets done the way you want.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)
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