Legal Question in Real Estate Law in California

Re: Real property/adding people to title

The answers to your first group of questions depend upon the type of investment intended and the understandings between the parties (including the written contract, if there is one, and if not, anything else that reflects intent at the time the deal was put together). There are two types of "investment" in real estate -- true equity investment that results in some kind of co-ownership; and lending, in which the lender only expects repayment, with interest, but is not an owner in the true sense of the word.

If the investors were intended to be co-owners, it may be desirable to convey the intended interests to them by grant deed. Of course, the deed should clearly state the percentage interest conveyed, or you could unintentionally give away full ownership. Title would then be held as cotenants. The percentages of each cotenant would be as specified, e.g. 1/3 - 1/3 - 1/3 or 60%-25%-15% or whatever.

If the investors were really only lenders, their interest should be a lien on the property rather than co-ownership, and a note secured by a deed of trust would be appropriate.

Any transfer of an interest should be done with care as to tax assessments. The transfer may result in re-appraisal and setting of a new Prop. 13 baseline value. Whether this occurs at all or whether the effect is significant depends upon facts not set forth in your question. In any event, I strongly recommend using a real-estate lawyer to review the deal and prepare the needed instruments.

As to your second question, the right to homestead exemption is available to owner-occupants only. Non-resident investors do not ordinarily benefit from the two homestead provisions ("automatic" and "declared") provided for by California law.

Re: Real property/adding people to title

If this is a loan do not add them to title. If it is a loan you should use a subordinate deed of trust. If it is a sale you can use a deed to transfer a prorata interest in the property. You should have the documents drawn by an attorney so you don't screw up the "record" title to your property. As to homesteading, an attorney can prepare a declaration of homestead for you as well. All documents get recorded in the office of the county recorder.

Re: Real property/adding people to title

This is not a simple situation as effects the real property and each individual involved. Depends on the status of the individuals. You, it is clear are the owners as well as the residents of the property. The others are nonresidents but I'm not sure what their status is --- if they went to the money and expect repayment, if they expect repayment after the sale of the property, if they have in interest in the increase in value only wore an interest in the property itself in some proportionate share. Hopefully you had an attorney draw the agreement between all of you. This is not the kind of transaction that individuals who are not schooled in real property law should deal with. My advice is yet an attorney who knows what they're doing in real property so that the attorney can structure the documents which are necessary. Remember, these documents effects of the chain of title and could affect you personally significantly in the future. Therefore, you do not wish to prepare a document which is not in your best interest and effects you financially contrary to your rights. I am in the San Francisco Bay Area and if you wish to consult with me 925 -- 945 -- 6000

Re: Real property/adding people to title

You might be best to have them record a security interest and not put them on the deed.

Joel Selik

Attorney/Real Estate Broker

www.seliklaw.com