Legal Question in Real Estate Law in California

I bought a home to rent with a partner and it was rented for 2 years. Now the market has tanked and I can't afford the negative cash flow, and it is vacant. Can I deed my interest to my partner and end my obligation to pay?


Asked on 3/17/10, 12:14 pm

4 Answers from Attorneys

No. You remain obligated on the loan until it is paid off by sale or refinance. Also, deeding away your share would most likely be an event of default on the loan. If your partner can refinance in his/her own name, then you could do it.

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Answered on 3/22/10, 12:19 pm
Terry A. Nelson Nelson & Lawless

Nice try. You remain liable on the loan, no matter what you do, unless the loan is paid or renegotiated somehow.

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Answered on 3/22/10, 1:07 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Not ordinarily, because there is very little legal connection between being an owner of property and being an obligor on a promissory note for which the property is collateral. If anything, by divesting yourself of the property, you'd make yourself a bigger target for the lender's wrath by allowing a change of ownership of the collateral for your obligation. Your better bet is to try to negotiate with the lender. This is easier in situations (purchase money loans on owner-occupied homes) where the lender probably wouldn't have personal recourse to the borrower(s).

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Answered on 3/23/10, 12:09 am
Ken Koenen, LLM Law Office of Ken Koenen

Not to mention that no one can deed property to someone without his permission. Otherwise, he could deed the porperty to you so you would be responible. Then what would happen.

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Answered on 3/23/10, 8:54 am


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