There are many occasions on which you may need to transfer ownership of real property. A Deed confirms ownership of real, physical property. In order to complete a transfer of real property, you must sign over ownership and legally transfer the property using some type of transfer deed. Once the deed is recorded in the proper county, you are essentially done. However, the process can be more complicated, especially if you fail to properly prepare the deed or include an incomplete legal description. In addition, it is possible to record an incorrect deed that fails to properly transfer real property, but not be aware of the problem until it is too late. A Recorder’s Office does not validate that the deed is correct or that it transfers title as intended. Finally, use the right type of deed! The wrong deed will cause your transfer to self-destruct.

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A People’s Choice can help you transfer ownership of real property. We keep an eye on the details and make sure the deed contains all proper and necessary information for your specific situation. Read on to learn more about this deceptively simple-looking process.

Types of Deeds to Transfer Ownership of Real Property

First and foremost, make sure you use the right type of deed to transfer ownership of real property. There are several types of deeds to choose from. The most common type of California deed is a grant deed. In some states, this document is known as a warranty deed. If you are selling the property to a stranger, then you would typically use a grant deed. With this deed, the seller guarantees they have good title to the property. This means that they are not hiding any debts or easements. An easement left undisclosed creates problems since it may obligate the new owner to something they wish to avoid. Buyers like grant and warranty deeds because the seller asserts they will “defend the title” if there are additional claims. Most sellers do a title search before selling to make sure they will be able to avoid this.

In contrast, quitclaim deeds offer much less certainty. They provide no assurance the title on the property is good. Many people will not transfer ownership of real property using this type of deed, but there are scenarios in which using this kind of deed makes sense. Some attorneys describe the decision to use a quitclaim as essentially saying, “I might not even own this property, but whatever I do own is yours.”  Quitclaim deeds are mostly used to transfer property between family members.

If you are not sure which type of deed to use, talk to an expert! Even if you need to accomplish something informal with a family member, you must understand what you are getting into depending on what deed you use.

Determine How to Title the Property

When the time comes to transfer ownership of real property, the new owners will be the ones deciding how they want to hold title to the property. This is a very critical part of the title transfer. You cannot transfer ownership of real property if the buyer or new owner cannot come to a decision about how they will hold that property. There are many options, including:

  • joint tenants
  • tenants in common
  • sole owner

In the first two options, the main difference revolves around what happens to the property if and when one of the owners dies. In a joint tenancy, the shares automatically go to the co-owner without going through probate. On the other hand, tenants-in-common may receive shares through probate and the heirs may, as well, even though the heirs may not be listed as co-owners on the deed. To further complicate matters, if new owners are married, they must decide immediately what to do in terms of whether to put just one or both spouses’ names on the deed.

How to Record the Deed

Once you have the right type of deed and the right owners for the title, you can record the deed. The recording takes place in the county of the property’s location. California requires you file several documents in order to fully record the deed:

  • A Preliminary Change of Ownership Report, filed with the deed.
  • A Reassessment Exclusion Claim if the transfer is between spouses, parent/child(ren), or grandparent/grandchild(ren). This document prevents the reassessment of property values and resultant higher property taxes.
  • New Supplemental Recording page which assesses an additional fee per the Buildings Home and Jobs Act if an exemption of the fee is not available to the new owner(s).
  • A Documentary Transfer Tax you pay when the deed is recorded.  This is similar to a sales tax on the property and is based on the value of the property. The amount varies depending on locality. If you seek to transfer ownership of real property in certain circumstances, you might avoid this tax. These circumstances and exceptions include quitclaim deeds, gifts, second mortgages, foreclosure, transfers to the government, divorce, transfers in or out of a trust, changes in the method of title (e.g. joint tenancy to tenancy in common), and death.  If the transfer is exempt, add a statement saying so when the deed is recorded.

As you can see, transferring ownership of real property can be complicated. Contact A People’s Choice for more information about how to transfer ownership of real property. We can prepare the required documents and give you peace of mind that the process is correct and will serve the purpose intended. Call us today at 805-648-5540.

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