Legal Question in Real Estate Law in California

Re: Liability issue regarding mortage and deed

Co-signing on a loan makes you a guarantor of repayment of the loan, not a co-owner of the property. You certainly can, and probably should, not have your name appear on the deed, if you are satisfied that your daughter will make the payments and co-ownership is not necessary to protect your interests.

As a financial guarantor and not a co-owner, the chances that you could be sued successfully are very slight. Any such suit would probably have to rely on a theory that you were negligent in setting your daughter up in her own home; this theory might fly if your daughter had a history of irresponsible behavior or criminal activity. Otherwise, the chances of successfully sueing you are really remote.

Nevertheless, I have a simple recommendation to let you sleep easier. Require her, as part of your guaranty deal, to carry homeowner's insurance (she'll need at least fire insurance anyway) with broad public-liability coverage and a fairly high limit, and then have yourself/selves added as co-insured(s).

Consult your insurance agent for particulars on how to protect yourself. Naming additional insured parties is usually free.

Re: Liability issue regarding mortage and deed

Yes you can if the lender will agree. Additionally, make certain there is liability insurance on the property and ask that you be named an additional insured.

www.SelikLaw.com

JOEL SELIK

CA Attorney and Real Estate Broker