Situation: my girlfriend moved in with her boyfriend. The relationship is serious. Bf wants to put gf on the deed to his house, but today she tells me a lawyer said it would take big bucks (like a percentage of the mortage) – thousands of dollars. I wondered how much of it was the lawyer’s fee. I told her to call the county courthouse and see what they say. Another friend tells her to just get married and the problem would be solved. She doesn’t want to get married. (BTW, they live in Howard Co., Maryland.)
Free advice: It costs nothing and it’s worth the price.
I have a good method: tell her to put the house in my name first and I’ll take care of everything.
Well, it would probably cost something.
You can’t just go file a piece of paper adding somebody’s name to a deed. Title has to be transferred to a new person, and in some states, you may have to use a “straw man” to end up with the property in both parties’ names.
However, it shouldn’t cost thousands of dollars. Check with other attornies. You should be able to find someone who can do it on the cheap.
I am a licensed, Maryland real estate agent and with all due respect to the situation this “BF” sounds like …sigh no, must be polite. Anyway putting someones name on a deed is pretty damn serious business and it’s not all a one way street. Depending on how she is taking title she may be jointly responsible for any encumberances to the propery like environmental problems, property tax liabilities, property maintenance re municipal code enforcement issues and a host of other responsibilites as a joint owner (if deeded that way).
Assuming the BF is in a position to transfer a portion of his ownership interest, by shopping around you should be able to get the deed workup done for 400 - 600 dollars (not thousands) or about the cost of a simple settlement on a newly purchased house, however, if there are complications regarding how the “BF” is holding title all bets are off with respect to price.
I’m sorry I simply cannot comprehend a grown man, in control of his faculties adding a “girlfriend” to the deed no matter how “serious” the relationship is. It boggles the imagination. If they breakup he is so screwed.
In DC (where I am) I believe you pay no tax when you add your spouse to the deed but you pay the usual recordation tax (2% I believe) otherwise, just like it was a sale. But yeah, I agree these people sound like they don’t have a clue. In any case they’d need some serious legal advice.
It’s easy. Deeds simply convey property interests, commonly referred to as ‘ownership’. The owner of the property simply executes a deed (Warranty, Grant, or Quitclaim, usually) to another person, thereby transferring some degree of ownership to the other person. Using your example, the BF would execute a deed transferring whatever ownership rights he wants his GF to have from himself (as the individual owner) to “BF and GF” in whatever manner they choose to hold title.
The deed needs to describe explicitly two things: the degree of title that is conveyed by the deed, and the property for which title is being conveyed.
If you know what you’re doing, you can get the appropriate deed form from any stationery store, fill it out yourself, and record it. The only cost will be whatever the local recorder charges - a simple phone call to the recorder will confirm the fee structure.
You haven’t asked whether the Teeming Millions think this is a good idea, so I won’t answer that question.
Good News:
In Connecticut (where I practice real estate law) preparing a quit claim deed to modify title is cheap and easy. It shouldn’t run more than a hundred bucks. You also need to prepare state and maybe local conveyance tax forms to be filed with the deed (whether there is money changing hands or not).
Bad News:
The real problems lie in determining whether it’s a good idea. There can be Gift Tax consequences (giving the girl friend half of a hundred thousand dollar house for free is a fifty thousand dollar gift). If she pays for it there will probably be some sort of conveyance tax (there are two in this state). Conveying an interest in the property to a non-spouse can be a default under the “Due on Sale” clause in the mortgage and cause the lender to call the note and foreclose. Changing ownership may also cause an owner’s title insurance policy to terminate or reduce coverage.
All owners have to execute mortgages. If the girl friend has bad credit, giving her an interest could mean that future mortgage applications might be rejected. Also, her interest in the property would be subject to claims by her creditors. Better make sure she doesn’t owe big bucks (or have a big judgment outstanding). If she gets in a car accident and gets hit for big money damages her interest is up for grabs. (Does she have a big limit auto policy? You better check).
And, of course, when the relationship goes down the plumbing there will be a battle over who gets what and what happens to the house. Either owner can go to court and petition for a court ordered sale…even if the other owner doesn’t want to sell and even if the sale will bring only a fraction of the real value of the property.
Conclusion:
Changing title status is easy. Whether it’s a good idea is much more complicated. Get some professional legal advice, or, as we say in the trade, pay me now or pay me (more) later.
Excellent reply, JBenz. (Especially on the title insurance issue, which 9 out of 10 lawyers would have missed.)
I didn’t want to clutter up the o.p. with the issue of whether this is a good move or not – I agree it’s a dumb move; to make matters worse, gf has a townhouse and she’s selling it. Okay, they’re in their forties, in love, and are reasonably mature, but so what; if the relationship goes sour…
Oh well, I don’t tell her how to run her life. I’ll pass on the info re the deed. Thanks.