Deed transfers among joint tenants… explained
Each week this office receives several inquiries from homeowners seeking to transfer title to their property.
The scenarios include transferring title between spouses, between ex-spouses, between and among family members, transferring title to a revocable trust, transferring title to a LLC or corporation, and the list goes on. Their two main questions are:
- Who do I hire to prepare and record the deed and transfer forms?
- How much will it cost me?
The first question is simple since you should hire a licensed real estate attorney or a local title company to handle a title transfer.
The second question is not simple and, in fact, can be very complicated when determining such things as “no consideration” vs. “consideration” transfers.
In this series of blogs on title transfers, the attorneys here at Federal Title will attempt to address the most common – and some of the not-so-common – title transfer scenarios.
Scenario 1: Joint tenants, unmarried
Seemed like a match made in heaven – first semester property law class Sam had Sue at “Hello.” Following three years of law school, the love birds both landed big law firm jobs in DC.
Now seemed like the perfect time to live together and why not just buy a condo together; after all, it would be cheaper than renting. They buy a condo together as joint tenants and lived happily until, two years later, a break up ensued.
Sue wants out of the relationship and simply wants to gift her ownership and whatever down payment she originally contributed to Sam. In other words, she wants to transfer her ownership interest to Sam, receiving no consideration.
This is one of the most common scenarios we encounter. In DC, such a transfer is subject to transfer and recordation tax. If Sue and Sam were married or otherwise related as siblings or parent/child, then this transaction would be, according to DC law, exempt from the transfer and recordation tax.
Because they are unrelated, the tax will be imposed as follows using an assessed value assumption of $500,000.00 for the condo unit:
|Cost of Deed Preparation and Recording Fee||$500.00 (approx.)|
|Cost of Transfer/Recordation Tax||$5,500.00 (based on Sue’s 50% interest or $250,000)|
|Cost of Getting Rid of Sam||PRICELESS|
In the next segment, we will take a look at deed transfers in Washington, D.C. as they relate to a Limited Liability Company, or LLC.