Whether a loved one has passed or we are looking for a swift exit from a messy divorce, it might become vital at some point in our lives to remove a name from a property title.
A property title is a legal right to ownership of a property with the capacity to sell the property. Property titles are not only tied to real estate, but can provide proof of ownership to automobiles, boats, and other high-value ticketed items.
In this article, we will give you the details on removing names strictly from real estate property titles using a deed of conveyance.
Removing Name from Property Title Using a Deed of Conveyance
A deed of conveyance is a legal document where the seller of a property can transfer all rights to own and keep an asset, including property.
Sometimes money will be used to transfer all the legal rights of a property to a buyer unless it is considered a gift. The two types of deeds to remove a name from a property title under the umbrella of conveyance deeds are quitclaim deeds and warranty deeds.
What is a quitclaim deed?
A quitclaim deed is used to sign over the property title to another person. When a person signs a quitclaim deed, it indicates that they are once and for all giving up their claim or rights to a property.
There is no exchange of money or warranties and therefore a downfall to quitclaim deed is that there is very little buyer protection.
Quitclaim deeds are easy to file, but as a result of the little buyer protection it provides, they are considered as high risk. These deeds typically are used between people who trust one another, for example, a relative or a spouse.
You should note that a quitclaim deed has no effect on the mortgage obligation. Despite removing someone from the deed, all members listed on the mortgage are still responsible for payments.
What is a warranty deed?
This is a legal document that states that a person has the right to transfer property with the clear assurance that no one else is claiming ownership of it.
A warranty deed is more apt in situations where there are multiple owners to a property. This can be of great benefit as warranty deeds ensure that transfership of property can happen with no complications.
Removing name from property title after a divorce
Splitting up properties and valuables after a messy divorce can get even messier especially where real estate is involved.
In the case of a legally married couple divorcing, they have two options with their house: one partner can purchase the other partner’s stake in the property, or both can mutually agree to put the home on the market in order to pay off their mortgage to start anew and separate from one another.
In the case that one partner wants to buy the other partner out, that individual will have to discharge the existing mortgage by refinancing and applying for a brand new mortgage.
The individual that is leaving will be given their share of the house’s market value, and the remaining partner will entirely possess the home and be responsible for making all the mortgage payments moving forward.
It is important to note that to qualify for refinancing, the partner keeping the property will have to prove that they can financially meet the mortgage payments on their own. This is challenging if both partners’ salaries were required to qualify for the initial mortgage.
As a precaution, it is vital to take a second look at your finances if you want to keep your house post-divorce. It’s crucial that you can comfortably take on all the mortgage payments solo without getting into a financial pinch as a result.
In some cases, bringing your divorce papers or separation agreement with you when you go to close the loan on your home is necessary. The lender may require these documents to make any modifications to the original mortgage contract.
When do I use a quitclaim deed versus a warranty deed?
Depending on your situation, selecting which deed is better suited to you requires an understanding of the type of property and the people being affected by the change in the deed.
It is important to register that property law in Canada is determined by provincial and territorial governments, and not federally. This entails that policies for removing a person from a deed will considerably vary depending on where you reside in Canada.