We are frequently asked what is involved in removing someone from title. This inquiry may be triggered by one of the following situations:
1) It maybe desirable to remove someone from title because the other person or persons on title has a poor credit history and would make it difficult to refinance the present loan.
2) The property was jointly acquired by inheritance or as a gift. For example, mom and dad may have gifted the property jointly to their children. Joint ownership may no longer be desired.
3) One of the title holders has concerns about their liability due to the other party's actions and may wish to remove either themselves or the other party from title.
4) One or more of the title holders is perceived to be not paying a fair share of the expenses related to the ownership of the real property. This is often a cause of unhappiness among the titleholders.
A person on the title is considered to have an ownership interest even if they paid nothing for their interest or have paid nothing while they were on title.
One's ownership interest in the real property is typically recorded in the Bureau of Conveyances and is a public record. To properly remove someone from title, it is necessary to do a conveyance document legally transferring the title from that person. The document must be signed by all the necessary parties. The document needs to be recorded to provide public notice of the change in ownership.
Removing someone from title is not complicated when the person coming off title is willing to voluntarily remove themselves from title. The complication arises when someone does not wish to voluntarily relinquish their title interest.
If a person is not willing to voluntarily remove themselves from title, further negotiations on your own or with the assistance of a professional may resolve the problem. An agreement on the amount of payment to the person for their title interest is a common means of addressing the other parties' concerns.
Another possibility is the filing of a partition action. In a partition action, the property is typically sold and the net proceeds are allocated among the title holders in accordance to their stated interests and adjustments for contributions which the Court deems appropriate. The filing of a partition action generally should be done only after all other alternatives have been explored and exhausted. This is because a partition is a lawsuit and like most lawsuits, there is the risk of the unexpected. A partition action can also be expensive given the number of attorneys and professionals involved. Any title holder is entitled to bid on the property at the subsequent auction. Outsiders can also bid on the property. There is no guaranty that you will be the successful bidder. There is the real possibility that another person could be the high bidder. The Court will subsequently order what costs, including attorney's fees and costs, from the sale will be paid and will determine how the net proceeds should be allocated. |
