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May 22, 2019May 22, 2019

The Abstract of Title in Real Estate: What Is It?

Image of a stack of legal documents for real estate. Captioned: The Abstract of Title in Real Estate

An abstract of title is a written chronology of all recorded documents and proceedings related to a specific piece of real estate. It shows the names of all the owners, how long each held title, and what each paid for the property.

The abstract is used for verifying a property’s marketability. The abstract offers assurance that the property is just as the seller represents it, both in the accuracy of its physical description and the integrity of its title.

The classic title abstract goes back in history to the earliest available records—sometimes as far back as the original land grant or patent deed from the U.S. government.

The abstractor of title is the person who researches this history, summarizes the relevant documents, and certifies the binder as true and complete.

May 9, 2019May 9, 2019

Preferred Pronouns in Real Estate Deeds

Corey McCann is closing on a condo. Corey has just one more question for the title company agent:

I wonder why, in the definitions in the mortgage agreement for the recorder’s office, I’m called “Corey McCann, a single woman.” Only my name is relevant. I could understand declaring the single status—if there is a firm reason that the record must show, for example, that there is no co-habitant or person who might try to claim an interest in a divorce. But I don’t voluntarily identify myself in public documents or online by gender. I’d rather not do so now.

The title company agent answers:

May 6, 2019May 5, 2019

The Transmutation of Real Estate Ownership Between Married Couples in Community Property States

Image of a married couple sitting on a bench looking at a very nice house. Captioned: Transmutation of real estate ownership between married couples.

If you are married and live in a community property state, you and your spouse may not think about whether certain assets are community or separate property. The former is generally all property acquired during the marriage, and the latter consists of property owned by each spouse before they wed. Separate property also includes assets inherited by one spouse or gifted to the individual. Say one spouse inherited a house from their parents, and rent out the dwelling. The rent received by the inheriting spouse is considered separate property.

Perhaps the marital home is actually separate property, as one spouse owned it prior to the marriage. Even though the spouses may share financial responsibility for the house, such as paying the mortgage and taxes together, or other expenses such as insurance and repairs, in reality the home belongs to just one of them. No matter how much the non-owning spouse may contribute to the property’s upkeep, it’s not a marital asset. For fairness’ sake, it may make sense to change the property from separate to community, via a process known as transmutation.

April 26, 2019April 26, 2019

Don’t Quit Your Claim! A Quitclaim Deed Is Not a Mortgage Saving or Estate Planning Tool

Image of an old run down house with a cloudy background. Captioned: Don't Quit Your Claim! A quitclaim deed is not a mortgage saving or estate planning tool.

A quitclaim deed conveys—”quits”—a person’s interest in a property to someone else. Quitclaims prove useful in certain transfers of properties among family members or between divorcing spouses. The quitclaim allows separating partners to follow a court’s direction and leave one party as sole owner of the marital home. Quitclaims might seem convenient in other circumstances, but they are rarely the best choice.

In contrast to the warranty deed, a quitclaim deed offers no assurances of clear title. In most jurisdictions a recorder of deeds must simply record a quitclaim deed; it is not the recorder’s role to investigate the circumstances of the conveyance.

Scammers may take advantage of the quitclaim’s simplicity to siphon equity from vulnerable people. After recording a quitclaim, a bad actor may sell the property with no guarantees, rent it under false pretenses, or exploit its underlying value as collateral.

Spot the Mortgage Relief Scam

April 25, 2019April 25, 2019

Your Real Estate and Probate

When a person dies, the property owned by the deceased person—alone, or in the names of the deceased and another person without survivorship rights—finds its way to the county probate court.

If the deceased person co-owned property, and the living co-owner holds a right of survivorship, probate is not an issue for the real estate. The asset passes to the surviving owner upon presentation of a certified copy of the former owner’s death certificate. In other words, the surviving co-owner absorbs the share of the person who has died.

Yet many people die as the sole owners of real estate, which then becomes probate property.