Another deed question

[ACS2010]

What is the name of your state (only U.S. law)? Massachusetts

I saw that wonderd posted a question a couple days ago about removing someone's name from a deed without a signature, and I have a similar question but different circumstances. I recently purchased a condo with my father as a guarantor on the loan. The lender changed their mind twice at the last minute about which names they were requiring on all the documents; they ultimately decided that they would accept everything (deed, mortgage, etc.) in my name only, which is what we wanted and had originally been told months ago when we applied for the loan. My attorney had prepared a declaration of homestead for each of us when we thought the lender was going to require both names, but with the new understanding she only issued a declaration of homestead for me, as the sole owner.

The closing was highly disorganized and chaotic and the title attorney kept pushing me to sign documents faster so that everything could be recorded in time. I pushed back and read everything over as it was presented to me, only I never saw the actual unit deed signed by the seller and seller's attorney because I was not required to sign it so it was never given to me. Later on, after the closing, I downloaded the official forms off the Registry of Deeds website only to discover that the unit deed was issued in my name and my father's name. The mortgage is only in my name, as agreed. In the disorder of the closing, the title attorney did not look over the papers in her hand closely and recorded everything with the registry, regardless of the final agreement on the names.

I contacted the title attorney's office and they agreed that this was a mistake and that they have to correct it under the terms of the title insurance. However, their method of remedying the situation is to prepare a deed transfer (I think it's called a quitclaim deed?) where my father will sign over his portion of the deed to me. I have a couple questions about this:

1) Is this really the only way to make the correction? This doesn't seem right to me, since it was a clerical error on the part of the title attorney at closing and my father was completely unaware that his name was even on the deed (nor would he have agreed to it unless it was required by the lender).

2) Under this arrangement, would my father potentially be subject to gift or transfer tax, or could he otherwise be held legally or financially responsible for anything related to the condo during the time that he supposedly "owned" it?

Appreciate any insights anyone can share. I've asked the same questions of the title attorney but they are currently very pointedly ignoring me. That is a separate issue that I also have to deal with.

Thanks in advance!

 

[justalayman]

The closing was highly disorganized and chaotic and the title attorney kept pushing me to sign documents faster so that everything could be recorded in time. I pushed back and read everything over as it was presented to me, only I never saw the actual unit deed signed by the seller and seller's attorney because I was not required to sign it so it was never given to me. Later on, after the closing, I downloaded the official forms off the Regis

closing agents hate me. When they start shoving, I simply sit back and start reading. When I'm satisfied, I sign. God help them if I need to consult an attorney for an opinion as it is not typical to have attorneys present at closings in my area.

1) Is this really the only way to make the correction? This doesn't seem right to me, since it was a clerical error on the part of the title attorney at closing and my father was completely unaware that his name was even on the deed (nor would he have agreed to it unless it was required by the lender).

no but it is the cheapest, easiest, simplest and quickest way to do it.

2) Under this arrangement, would my father potentially be subject to gift or transfer tax, or could he otherwise be held legally or financially responsible for anything related to the condo during the time that he supposedly "owned" it?

somewhere along the line you have a contract aka purchase agreement. Is it only you as the buyer or is your father also listed as buyer? If the first, then no, he won't owe taxes as the inclusion was an obvious mistake and can be shown to be your father held no valid interest so he was not actually transferring anything to you but simply releasing any possible claims he might have on the property.

if the latter you are going to have a hard time explaining how it is he was included as a buyer of the property and as such included as a grantee on the deed yet was transferring no valid interest in the property to you.

 

[LdiJ]

What is the name of your state (only U.S. law)? Massachusetts

I saw that wonderd posted a question a couple days ago about removing someone's name from a deed without a signature, and I have a similar question but different circumstances. I recently purchased a condo with my father as a guarantor on the loan. The lender changed their mind twice at the last minute about which names they were requiring on all the documents; they ultimately decided that they would accept everything (deed, mortgage, etc.) in my name only, which is what we wanted and had originally been told months ago when we applied for the loan. My attorney had prepared a declaration of homestead for each of us when we thought the lender was going to require both names, but with the new understanding she only issued a declaration of homestead for me, as the sole owner.

The closing was highly disorganized and chaotic and the title attorney kept pushing me to sign documents faster so that everything could be recorded in time. I pushed back and read everything over as it was presented to me, only I never saw the actual unit deed signed by the seller and seller's attorney because I was not required to sign it so it was never given to me. Later on, after the closing, I downloaded the official forms off the Registry of Deeds website only to discover that the unit deed was issued in my name and my father's name. The mortgage is only in my name, as agreed. In the disorder of the closing, the title attorney did not look over the papers in her hand closely and recorded everything with the registry, regardless of the final agreement on the names.

I contacted the title attorney's office and they agreed that this was a mistake and that they have to correct it under the terms of the title insurance. However, their method of remedying the situation is to prepare a deed transfer (I think it's called a quitclaim deed?) where my father will sign over his portion of the deed to me. I have a couple questions about this:

1) Is this really the only way to make the correction? This doesn't seem right to me, since it was a clerical error on the part of the title attorney at closing and my father was completely unaware that his name was even on the deed (nor would he have agreed to it unless it was required by the lender).

2) Under this arrangement, would my father potentially be subject to gift or transfer tax, or could he otherwise be held legally or financially responsible for anything related to the condo during the time that he supposedly "owned" it?

Appreciate any insights anyone can share. I've asked the same questions of the title attorney but they are currently very pointedly ignoring me. That is a separate issue that I also have to deal with.

Thanks in advance!

Do not get hung up on the fact that the quit claim deed is being used to make the correction. The error is already documented and this is clearly to fix the error. There are not going to be any tax consequences because it can be proven that it was to fix an error.

 

[ACS2010]

somewhere along the line you have a contract aka purchase agreement. Is it only you as the buyer or is your father also listed as buyer? If the first, then no, he won't owe taxes as the inclusion was an obvious mistake and can be shown to be your father held no valid interest so he was not actually transferring anything to you but simply releasing any possible claims he might have on the property.

if the latter you are going to have a hard time explaining how it is he was included as a buyer of the property and as such included as a grantee on the deed yet was transferring no valid interest in the property to you.

I'm the only one on the Purchase & Sale. I was the only one on documents (other than some of the mortgage approval paperwork) throughout this process, it's just that the lender apparently changed their minds the morning of the closing and demanded two names, then changed their minds BACK at literally the last second (I had already left for the closing) and hence the mix-up. It's understandable, but the whole process would be much smoother if the title company would simply deign to explain to me what they are doing.

Thanks to both replies for the info; this is helpful background. It is just so strange to me that the quit claim release/transfer is the main resort for this kind of thing. My dog's name could've been on the deed and apparently this title attorney wasn't going to catch it. This was my first home purchase and I didn't even know to ask to see all the papers the seller was signing that I didn't have to. Next time I will definitely demand that I look everything over!

 

[tranquility]

The closing was highly disorganized and chaotic and the title attorney kept pushing me to sign documents faster so that everything could be recorded in time. I pushed back and read everything over as it was presented to me, only I never saw the actual unit deed signed by the seller and seller's attorney because I was not required to sign it so it was never given to me. Later on, after the closing, I downloaded the official forms off the Registry of Deeds website only to discover that the unit deed was issued in my name and my father's name. The mortgage is only in my name, as agreed. In the disorder of the closing, the title attorney did not look over the papers in her hand closely and recorded everything with the registry, regardless of the final agreement on the names.

As justalayman, I am this way too. Escrow officers want the signature, I want to read the documents. You would be amazed at the salesman tactics they use to finish up the file. They are quite perturbed when I listen to their rubbish and then ask if they would prefer a signature or agreement.