{"id":616,"date":"2019-03-21T09:45:17","date_gmt":"2019-03-21T13:45:17","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=616"},"modified":"2024-04-25T23:21:06","modified_gmt":"2024-04-26T03:21:06","slug":"refusing-to-accept-a-deed","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/refusing-to-accept-a-deed\/","title":{"rendered":"Refusing to Accept a Deed"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/03\/refusing-to-accept-the-deed-1024x538.jpg\" alt=\"image of an unsigned deed captioned refusing to accept the deed\" class=\"wp-image-617\" width=\"1024\" height=\"538\" srcset=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/03\/refusing-to-accept-the-deed-1024x538.jpg 1024w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/03\/refusing-to-accept-the-deed-300x158.jpg 300w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/03\/refusing-to-accept-the-deed-768x403.jpg 768w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/03\/refusing-to-accept-the-deed.jpg 1080w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n\n<p>For a valid\nreal estate deed conveyance,&nbsp;two key actions must occur:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The giver (called the grantor) must deliver it the recipient (called the grantee).<\/li><li>The grantee must accept it.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">A\nRecipient&nbsp;May Refuse to Accept a Deed.<\/h2>\n\n\n\n<p>Circumstances\nare not always right for taking&nbsp;on new ownership and new responsibilities.\nMoreover, not every piece of real property is desirable. Even with a\nsignificant estimated value, it might have hidden liabilities.<\/p>\n\n\n\n<p>Thus, the\ngift of a deed&nbsp;can, and sometimes should, be turned\ndown.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p>This can get\ndifficult if the grantor has the conveyance&nbsp;recorded with the\ncounty&nbsp;anyway, without the grantee&#8217;s knowledge. The&nbsp;grantee will then\nbe obliged to file a court petition to void the conveyance.<\/p>\n\n\n\n<!--more-->\n\n\n\n<p>A high-profile case in point began in&nbsp;2017, when a Tennessee resident&nbsp;filed a quitclaim deed&nbsp;transferring the interest in an acre of rural&nbsp;land to the Trump Organization. After the conveyance&nbsp;<a href=\"http:\/\/www.timesnews.net\/Business\/2019\/02\/03\/Hawkins-judge-voids-quitclaim-deed-giving-President-Trump-an-acre-near-Rogersville\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">became news<\/a>, the Trump Organization filed a petition to void the quitclaim, stating that the organization did not know about, let alone participate in, the deed transfer, execution, or recordation.<\/p>\n\n\n\n<p>In\nJanuary&nbsp;2019, Third Judicial District Chancellor Doug Jenkins voided the\ntroublesome deed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Checklist:\nSpot the Issues Before Accepting a Deed.<\/h2>\n\n\n\n<p>It is not\nuncommon for a nonprofit organization to receive an offer of land. But the\norganization&nbsp;should look for any potential drawbacks&nbsp;before accepting\na&nbsp;donation of real property. It is often best to refuse a&nbsp;deed\nif&nbsp;due diligence reveals&nbsp;that&nbsp;the land will create significant\nburdens.<\/p>\n\n\n\n<p>These are\nthe hallmarks of a well-maintained, trouble-free deed:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The donor (grantor) holds title to the property, as affirmed by the recorded deed, title policy, and property tax records.<\/li><li>No other co-owners or parties need to consent to the conveyance.<\/li><li>The donor intends to transfer the entire interest in the property.<\/li><li>No encumbrances exist on the property. Taxes, insurance, utility bills, and any fees or dues are paid up. There is no mortgage, land contract, or mechanic&#8217;s lien.<\/li><\/ul>\n\n\n\n<p>Optimally,\nthe deed is a general warranty deed rather than a quitclaim deed, so that the\ngrantor is warranting good title, free from clouds that would make the property\ndifficult to sell in the future. Alternatively, the donor should participate in\nthe drafting of a gift agreement, including an agreement&nbsp;to indemnify the\nrecipient&nbsp;organization if an unknown encumbrance or defect surfaces in the\nfuture.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Weigh&nbsp;the\nCosts and Benefits Before Accepting a Deed.&nbsp;<\/h2>\n\n\n\n<p>The grantee organization must become the new beneficiary of any title insurance policy. Title insurance is necessary\u2014especially in cases where only a quitclaim deed is given. If the donor wishes to cover insurance or other costs related to the property, the legal gift agreement should explain the terms of payment.<\/p>\n\n\n\n<p>Be sure,\ntoo, that the property is both professionally inspected&nbsp;and appraised.\nHigh-value real estate that will perform well on the market may justify the\nexpenses involved in accepting the deed.&nbsp;In addition to monetary value,\nthe organization should ensure that the property and its surroundings are\nconducive to uses the grantee could make of it, even if the only intention is\nland preservation.<\/p>\n\n\n\n<p>Examine&nbsp;the\nlikely maintenance costs for the property. Any outstanding contracts,\nagreements, or offers to buy or sell the property must have acceptable,\nsustainable terms.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">To\nPrevent Liability, an Organization Might Decide Not to Take the Deed Directly.<\/h2>\n\n\n\n<p>To address\nliabilities, consider the options for accepting the deed and holding the\nproperty:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The organization accepts the deed as a direct gift.&nbsp; <\/li><li>The organization forms a sole-member limited liability company (LLC) to accept and hold the property. This is especially prudent if the property could contain environmental or other liabilities.<\/li><\/ul>\n\n\n\n<p>The Internal Revenue Service&nbsp;<a href=\"http:\/\/www.irs.gov\/pub\/irs-drop\/n-12-52.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">deems<\/a>&nbsp;a charitable contribution to an LLC wholly owned by a charity&nbsp;tax-deductible\u2014to the same extent as a contribution made directly to&nbsp;its sole member, the charity. Yet some states may deem&nbsp;the LLC ineligible for&nbsp;property tax exemptions. Check state and local tax provisions.&nbsp;&nbsp;<\/p>\n\n\n\n<p>To&nbsp;understand\nall cost, income, and&nbsp;tax ramifications, the\nrecipient&nbsp;should&nbsp;consult with&nbsp;its&nbsp;accountant, and\nseek&nbsp;a tax attorney&#8217;s advice.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Be\nAware of Potential Environmental Hazards<\/h2>\n\n\n\n<p>Your due\ndiligence should include an Environmental Site Assessment (ESA) to\nevaluate&nbsp;the environmental liability of the property.&nbsp;<\/p>\n\n\n\n<p>Seek advice\nfrom&nbsp;a qualified environmental specialist to select the&nbsp;proper\nassessment&nbsp;for either residential or industrial real estate.<\/p>\n\n\n\n<p>Environmental\ndue diligence is normally a buyer&#8217;s responsibility. Yet in the case of a gift\nto an organization,&nbsp;the donor (grantor) may be reasonably expected&nbsp;to\nconduct it. This enables the donor to make&nbsp;appropriate representations and\nwarranties, to avoid conveying heavy burdens and liabilities, and&nbsp;to\ncorrectly assess the value of the donation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How\nto Refuse the Deed<\/h2>\n\n\n\n<p>Use a\nwritten disclaimer if you receive an unwanted deed. Follow federal tax\ndisclaimer laws for deadlines. Select your state to view the <a href=\"https:\/\/www.deeds.com\/forms\/ohio\/disclaimer-of-interest\/\">Disclaimer of\nInterest&nbsp;(such as this page&nbsp;for an Ohio disclaimer)<\/a>. Execute a\ncopy to submit to the&nbsp;recorder of deeds in the same county as the\nproperty. Note that the Ohio provision&nbsp;we link here matches Internal\nRevenue Code Section 2518, which requires you to submit the&nbsp;disclaimer\nwithin&nbsp;9 months of the property conveyance.<\/p>\n\n\n\n<p>Forms on&nbsp;<em>Deeds.com&nbsp;<\/em>are always easy to download and complete, and continually updated. <a href=\"https:\/\/www.deeds.com\/contact-us\/\">Contact us<\/a>&nbsp;with questions, keeping in mind that legal advice must come&nbsp;from your own lawyer, based on an examination of your case-specific facts and needs.<\/p>\n\n\n\n<p class=\"has-small-font-size\">Supporting references:<br>\nhttps:\/\/nonprofitlaw.proskauer.com\/2012\/08\/10\/irs-finally-confirms-that-contributions-to-single-member-llcs-owned-by-charities-are-deductible\/<br>\nhttps:\/\/www.ksmcfs.com\/foundation-insights\/tax-deductible-contributions-to-single-member-limited-liability-companies<br>\nhttps:\/\/corporate.findlaw.com\/law-library\/site-assessments-and-other-environmental-due-diligence.html<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For a valid real estate deed conveyance,&nbsp;two key actions must occur: The giver (called the grantor) must deliver it the recipient (called the grantee). The grantee must accept it. A Recipient&nbsp;May Refuse to Accept a Deed. Circumstances are not always right for taking&nbsp;on new ownership and new responsibilities. Moreover, not every piece of real property [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[89,71,79],"tags":[],"class_list":["post-616","post","type-post","status-publish","format-standard","hentry","category-disclaimer-of-interest","category-general","category-gift-deed"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Refusing to Accept a Deed - Deeds.com<\/title>\n<meta name=\"description\" content=\"Circumstances are not always right for taking on new ownership and new responsibilities. 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