Legal Question in Real Estate Law in California
A person places their sibling on the deed as "joint tenant." Now they needs to remove the sibling. What needs to be filed? A Grant Deed or Quit Claim. All parties are willing and there are no issues. This is in California. Thank you.
1 Answer from Attorneys
Either will accomplish the basic purpose. A grant deed carries with it a couple of warranties that make it slightly more advantageous for the grantee and a little less safe for the grantor. A quitclaim carries no warranties and is better for the "grantor" (person surrendering his interest).
There are a few things the siblings should be aware of before assuming that there are no issues, however:
1. If there are any loans involved, any change in how title is held is likely to be a violation of the loan terms, specifically, the "due on sale" clause, which probably covers no-charge transfers of a partial interest as well as sales of the whole property. If in doubt, get an OK from the lender.
2. Recording any change in ownership, including removal of a part owner from title, may cause a reassessment of the property for county property-tax purposes.
3. A change in ownership of property will also affect the federal and state income tax liability of the sibling. The transfer will need to be reported for capital-gains (or losses) purposes, and possibly, but probably not, for gift-tax reasons. I'd recommend getting tax advice.