HOW DO I REMOVE THEM FROM TITLE?

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.

ARE YOU PAYING MORE THAN YOUR SHARE OF REAL PROPERTY TAXES?

Escrow companies no longer automatically file home exemptions for you when you purchase real property in Hawaii for your personal residence. A home owner's exemption is an amount excluded from real property taxes, because the real property is intended to be used as your personal residence.

The filing of the home exemption must be done by September 30 to be applicable for the following year. You are allowed only one home owner exemption at any given time. You are entitled to the exemption for as long as you own the home and use the property for your residence.

To be entitled to the home exemption, you must satisfy all the following criteria:

1. You own and occupy the property as your principal home.

2. Your ownership is recorded in the Bureau of Conveyance on or before September 30 preceding the tax year for which you claim the exemption.

3. You filed a Claim for Home Exemption (Form BFS-RP-3) with the Real Property Assessment Division on or before September 30 preceding the tax year for which you claim the exemption.

The amount of the home exemption automatically increases upon your reaching a specific age. The current schedule for home owner's exemptions are as follows:

$ 40,000 for owners up to 55 years of age before June 30 of the preceding year

$ 60,000 for owners 55 to 59 years of age before June 30 of the preceding year

$ 80,000 for owners 60 to 64 years of age before June 30 of the preceding year

$100,000 for owners 65 to 69 years of age before June 30 of the preceding year

$120,000 for owners 70 years of age or older before June 30 of the preceding year

If you failed to file your home exemption, you are paying more than you need to in real property taxes. You can, though, before September 30, file the claim for home exemption for the following and all subsequent years. You only have to file the claim for Home Exemption once for your residence. If you did not file for your home exemption and you wish to receive Claim for Home Exemption, Form BFS-RP-3, we will send the form to you if you send us a written request and a stamped self-addressed envelope.

People have occasionally asked about putting a minor on title. It is easy to put a minor on title, but it can be much more involved to remove the minor from title or to sell the property if one of the title holder is still a minor. This is because a minor, by law, does not have the legal capacity to contract. It may be necessary to initiate a court proceeding to have an adult appointed to sign on behalf of the minor. This is an additional expense and may cause undesirable delay in the attempt to sell the property, refinance the property or to take any other action pertaining to the property.

HUMOR

One day on the way to preschool, the doctor had left her stethoscope on the car seat, and her little girl picked it up and began playing with it. “Be still, my heart, ” thought the doctor, “my daughter wants to follow in my footsteps! ” Then the child spoke into the instrument: “Welcome to McDonalds. My I take your order?”

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This guy was lonely and so he decided life would be more fun if he had a pet. So he went to the pet store and told the owner that he wanted to buy an unusual pet. After some discussion, he finally bought a centipede, which came in a little white box to use for his house.

He took the box back home, found a good location for the box, and decided he would start off by taking his new pet to the bar to have a drink. So he asked the centipede in the box, “Would you like to go toFrank's with me and have a beer?“ But there was no answer from his new pet. This bothered him a bit, but he waited a few minutes and then asked him again, “How about going to the bar and having a drink with me?“ But again, there was no answer from his new friend and pet.

He waited a few minutes more, thinking about the situation. He decided to ask him one more time; this time putting his face up against the centipede's house and shouting, “Hey, in there! Would you like to go to Frank's place and have a drink with me?”

FROM THE DESK OF HAROLD CHU

In this issue, we have several suggestions that might save you some money.

Most escrow companies no longer file home owner's exemption for you when you purchase real property intended to be your residence. If you recently purchased a new home, you should make sure you have filed a home owner's exemption by September 30 to qualify for the home owner's exemption for next year and for all subsequent years you own and use the property as your personal residence.

The recent appreciation in value may allow some of you who pay private mortgage insurance to eliminate this monthly charge. You might also be relieved of this payment if you have paid down your mortgage to the desired loan to value ratio. See our article on private mortgage insurance.

Each of the foregoing requires a little effort, but could result in substantial dollar savings for you.

PRIVATE MORTGAGE INSURANCE

Private mortgage insurance is a special form of insurance which permits lenders to increase the amount of the loan they can offer for the property which is the subject of the loan. Many lenders cannot lend more than 70% or 80% of the market value of the real property. Private mortgage insurance allocates the risks and permits the lender to lend a greater percentage of the market value of the property.

The borrower pays the monthly premium for the private mortgage insurance. The amount of the premium for this mortgage insurance is dependent upon the amount of the loan and is calculated differently from lender to lender.

There are ways that you can later eliminate the need to pay the monthly private mortgage insurance premium. If you have paid down your mortgage loan balance so that the balance of the unpaid loan when compared to the appraised value of your property is less than the required loan/value ratio, you should contact your lender to see if you can be relieved of the need to continue to pay private mortgage insurance.

In this current climate of fast appreciating property values, there is the possibility that the appreciation in your property's value has allowed you to reach the desired ratio. Typically, the borrower will have to pay the cost of having the property re-appraised. Some lenders, however, will accept the tax assessed value. There may also be limitations on how much time must expire before you can eliminate the private mortgage insurance. The rules and procedures will vary from lender to lender.

If you are paying private mortgage insurance premiums, you may wish to contact your lender for specific details of the lender's required conditions and procedures before private mortgage insurance can be eliminated.

WHAT IS A LAWYER

“Lawyer: An individual whose principal role is to protect his clients from others of his profession.” - - Anonymous

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“The minute you read something you don't understand, you can be almost sure it was drawn up by a lawyer.” - - Will Rogers

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A small town that can't support one lawyer can always support two.

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How does a pregnant woman know she is carrying a future lawyer? She has an extreme craving for baloney.

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What do you call a lawyer gone bad? Senator.

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What do you get when you cross a librarian with a lawyer? All the information you need - - but you can't understand a word of it.

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What do you get when you cross the Godfather with a lawyer? An offer you can't understand.

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“Lawyers: persons who write a 10,000 word document and call it a brief.” - - Franz Kafka

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A doctor, an engineer and a lawyer were arguing over whose was the oldest profession. The doctor asserted that, of course, a physician removed Adam's rib to create Eve. The engineer disagree and said, “Of course, an engineer had to have constructed the Garden of Eden.” ”I have you both beaten,” the lawyer gloated. “Before Adam and Eve, before the Garden of Eden, before all creation, there was a state of chaos, and who but lawyers could have created that?”

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Attorney :
Harold Chu
hchulaw@lava.net

Publisher/Editor :
Cora Anderson

Secretaries:
Cora Anderson
Janette Reyes

Printer:
NewTech Imaging

Telephone: (808) 523-7544
Facsimile: (808) 526-1231
E-mail: hchulaw@lava.net
http://www.attorneyhawaii.com

Copyright © 2009 by Harold Chu. All rights reserved.

The information you obtained at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.