Sharing title to real estate with a minor, while generally lawful, can lead to legal complications. Each state defines the basic rules for conveying ownership of real property in its statues, but those rules apply to dealings between adults. When minors are involved, the situation becomes more complex.
There are numerous ways that minors gain title to real estate. Perhaps the parents think adding their minor children to the deed of the family home is a useful way to ensure that the children will keep the house in the event of the parents’ unexpected deaths. In other cases, minors inherit property, either on their own or in co-ownership with others. These are only two of many possible examples, but regardless of the reason, if the child and the co-owners (if any) are unable or unwilling to keep the property until the minor reaches the age of majority (18-21 years old, but varies by state), selling the property or changing how it is titled will present some challenges.
Co-ownership means that the parties named on the real estate deed share a present interest in the property, even those parties who are not legally of age. Because real property interests tend to involve money, it is essential to ensure that each party receives fair treatment. Therefore, depending on the state, to sell the property or simply to remove the minor’s name from the deed, it may be necessary to use a guardian ad litem or other court-appointed personal representative to stand for the child during the transaction. In addition to hiring an attorney to resolve other potential issues, the parents or other co-owners could be obligated to compensate the representative.
To address some of the issues associated with titling property in a minor’s name, nearly all states have incorporated a version of the Uniform Transfer to Minors Act, most recently updated in 1986, into their statutes. Section 9(a)(5) of the UTMA addresses real property in particular, stating that “an interest in real property is recorded in the name of the transferor, an adult other than the transferor, or a trust company, followed in substance by the words: ‘as custodian for (minor’s name) under the [state] Uniform Transfer to Minors Act.” By referring directly to the UTMA, the transfer, as well as its management and possible future conveyance is governed by a set of rules that is consistent across much of the US.
Even though Georgia, Ohio, South Carolina, and Vermont have not joined with the UTMA, they include related statutory regulations to ensure adequate protections for minors. Both South Carolina’s and Vermont’s codes refer to the Uniform Gifts to Minors Act (UGMA), which was updated and renamed in 1986. According to the Uniform Law Commission (ULC), these rules may not provide adequate protection for the minor’s interests because “the states have significantly changed their versions of UGMA over the years, an important aim of the original act — uniformity — has been lost. This means persons making transfers under their state’s UGMA can’t be assured the transaction will be recognized and subject to the same rules everywhere.”
Arizona real estate and contract attorney Carlton Casler provides further insight with the following Q & A:
Q: What about situations in which a minor is the sole owner?
A: If a minor has title to real property and sells or gives the property to someone else, the transaction is “voidable,” which means the minor may recover title to the property any time before or shortly after reaching the age of majority. The minor/grantor must return the purchase price.
Q: What if a minor purchased the property? Can he/she sell it then?
A: Similar to above; the purchase is voidable and the minor may demand return of the purchase price and return the deed to the grantor. If the minor does not void the transaction, yes, the minor can legally sell it, but (as described above) the sale is voidable by the minor.
Q: Real estate deeds seem to have a lot in common with contracts. Are they the same thing?
A: No. A deed is evidence of title.
Q: Who is responsible for knowing the grantor’s age at the time of the transaction, and how old the grantor must be to legally convey the property?
A: The grantee is responsible.
Q: Does the rule still apply to a private sale?
A: Yes.
Q: Is there any recourse for a grantee who did not know he/she purchased real property from a minor?
A: As stated above, the grantee is responsible for verifying the grantor’s age, so if he/she is underage and decides to void the transaction, the grantee is entitled to a return of the purchase price. In addition, if the minor misrepresented his/her age, the grantee may have a claim for misrepresentation or fraud.
Overall, there is no simple way to remove a minor from a real estate deed without a lawyer.
This article is solely provided for purposes of general information and education. It is not offered as, nor does it constitute, legal advice or legal opinions. Every attempt is made to provide current information, but there is no guarantee of a complete analysis of the topic. Transmission of this information is not intended to create, nor does the receipt of which constitute an attorney-client relationship between sender and recipient. Each situation is unique, so please contact a local real estate attorney to resolve this or other complex property issues.