Legal Question in Real Estate Law in California

Re: Ownership in a house

A merry Christmas card; because now that they have title in their name alone, you would be very lucky if they would still be willing to give you your one-third back. Presuming they are willing to give you back your one-third, then you could use a quit claim or grant deed indicating that they are transferring you a one-third interest. Note that the IRS may have some gift tax questions, so you may want to get something in writing that says that you always had a one-third interest, but that the deed is just memorializing it.

Re: Ownership in a house

Your story is too incomplete to tell you exactly what needs to be done, or can be done. In many cases, when you give up part ownership to property, it is gone, and you can't get it back unless the new owners that you gave it to are willing to give it back. In a few cases, it might be possible to recover an ownership interest that you gave away, but that's unusual.

In the best of circumstances, your sister and brother in law may be willing to give you back a 1/3 interest. They probably don't have to. The instrument that is needed to accomplish this is a deed. The deed would have to be written to show that the two of them are granting to you a one-third interest.

However, before doing this, it would be very useful to have a lawyer trace out the prior transactions, going right back to the original three-party purchase, and the financing used by the three of you (assuming you didn't pay all cash). This review of the documentation should look at who is obligated on the loan and whether it contains a due-on-sale clause, and whether your decision to "take my name out of the house" was done with legal effect, i.e., whether you had an interest in the first place, and whether you really surrendered it in a legally-cognizable way by executing and delivering a deed for your 1/3 (or whatever) interest, which was subsequently recorded.

In deals like this, an investigating attorney often finds out that what the parties think is the situation really isn't, because some document wasn't ever prepared, or it was defective, or it was never recorded, or something. So, step one here is a top-to-bottom review of the status of title.

Another factor to consider is that whenever co-owners or family members start flipping part interests in real estate back and forth without proper advice, they create tax problems and lender problems. Every change of part ownership will result in a reassessment (except in certain family generation-to-generation transfers) for property taxes, and will result in federal and state gift and capital gains tax liablity. Not reporting the taxes due won't work, either; the tax collectors are likely to find out from the county property records.

So, the short answer is that you need to have the owners execute, notarize and deliver a deed conveying a 1/3 interest to you. The real answer is that there is probably a title, loan and tax liability mess and you or someone needs to start pushing a broom to clean up said mess.