Legal Question in Real Estate Law in California

Re: Should we record a quit claim

The main purpose for recording the deed is to provide constructive notice to the public. If you don't record the deed, it will be subordinate to any later deed your brother-in-law may give which is recorded before yours. Recording prevents someone from selling the same property more than once.

The property taxes will be reassessed under Prop. 13 when ownership transfers. If your mother-in-law were still alive, you might be able to avoid reassessment by having the brothers deed the property to her, and have her deed it to your husband who could then deed half of it to you. If I recall correctly, transfers between parent and child and between husband and wife do not trigger reassessment.

It is true that only the 1/3 interest that is transferred will be reassessed. If it were my property, I would record the deed.

Re: Should we record a quit claim

I agree with the previous advice, and would like to add an observation or two.

Any reassessment could be based upon an appraisal but more likely would be based upon the price reflected in the deed and any other papers submitted at recording. If the price was set 15 years ago, it may have little impact on your taxes.

Further, the amount you paid would, for economic purposes, consist of a mixture of principal and interest. To the extent the amount can fairly be characterized as interest, it is not part of the price and most likely would not be considered in determining the value of the property.

Unless the increase in value is very large and quite obvious to the county, the reasons for recording outweight the reasons not to record. Further, failing to record in order to avoid reassessment smacks of tax evasion.