Legal Question in Real Estate Law in California

Here are the three main ramifications:

1. Nearly all residential loans have a due-of-sale clause. These also apply to gifts. In theory, your loan becomes due in full the minute you transfer the collateral property. Sometimes lenders will waive the clause or overlook its enforcement, but you should be aware of this and maybe ask for a written waiver before you give the house away.

2. The county will reassess the property for property-tax purposes when ownership changes. The new value may be higher, if you have owned the property for a long time, resulting in a tax increase.

3. Disposition of your personal residence by sale or gift will have some Federal income tax onsequence for you, and also, someday, for the donee. Both of you should ask a tax advisor or advisors.

There may be other considerations, but I think #1 is quite important.......it would be helpful if we had additional information, such as whether the loan is current, whether and how much the property is "under water," whether you have considered renting, and so on.

I would just add that if you are transferring title to avoid creditors or legal judgments, the transfer will be voidable as a fraudulent transfer, and the process of having creditors void it will be very expensive for you and possibly whomever you transfer it to.