Real Estate Law | Impacts of deed changes
Dear Mr. Feichthaler:
I recently purchased a property with my boyfriend, and we have decided he no longer wants to be on the deed. We purchased the property with a mortgage. He is not seeking any money for the transfer. Is this as simple as him signing a quitclaim deed to me? Also, I note that the tax bill I received has some other name, in addition to ours.
I often have clients that purchase property together for various reasons, then decide to remove an owner. There are several issues that may arise in this proposed transfer. First, since there is a mortgage on the property, the transfer will trigger documentary stamp tax. The State of Florida charges 70 cents for every $100 of payment of consideration. Usually, consideration is the amount paid for a property. In your situation, your boyfriend is not seeking payment. However, the Florida Statutes specifically define consideration as mortgage debt. Even though he will still be on the mortgage and note, the state will require tax paid on this deed. If the mortgage is $400,000, for instance, there would be a $1,400 documentary stamp tax.
Also, your lender may require your loan to be paid off upon any transfer. Nearly every mortgage has a “due on sale” clause, and one may be triggered with the recording of the deed. You will want to confirm with your lender that the transfer does not require immediate repayment.
Regarding the tax bill showing an additional name, this is something you should address with the title company or law firm that handled, and do so immediately. There may be an issue with title, where a prior owner did not properly deed the property out. This should be resolved prior to any additional deeds being prepared. If the title company does not adequately address the situation, a title claim against your policy may be required.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at email@example.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.