> Homeowners' Advice
The Importance Of Checking Title Status
by Benny L. Kass
Question: We purchased our home in the late 1970's and have refinanced four times. We cannot find a copy of the deed to our property, and don't recall ever receiving that document. Can we get a replacement? Shouldn't we have received a deed when we refinanced? The reason this is important is that we want to make sure that probate will not be necessary when one of us dies. We believe that the deed merely states both our names, with no other description. What should we do? Answer: You have asked two questions -- both are important and deserve a complete response. When you first purchased your house, the title attorney or title company that handled your settlement should have sent you the deed to the property. The settlement officer would have arranged to have the deed recorded among the land records in the jurisdiction where your property is located, and after receiving the recorded deed back from the Office of Recorder of Deeds, should have sent you that deed, along with a copy of your title insurance policy. When you refinanced, however, you will not get a deed. You already own the property, and thus there is no one who can deed the property to you. You both signed a deed of trust (a mortgage) whereby you deeded the property in trust to a trustee selected by your mortgage lender. But that is not a deed. In the event you are in default on the terms of your mortgage, the trustee (after complying with local law regarding foreclosures) would have the right to sell your property at a foreclosure sale. If you cannot locate your deed, it is a relatively simple matter to get a copy. Contact the Recorder of Deeds in the county (or city) where your property is located, and that office should be able to give you a copy, for a nominal fee. All deeds, once they are recorded, are copied and stored with the Recorder of Deeds. Your second question raises a very important issue. You believe that the deed just lists your names, but may not show how title is held. Let's take a minute and explain how property can be held. Oversimplified, there are three ways that property can be held when owned by two or more persons: Tenants in common: Here, each owner owns a percentage interest in the property. It is usually held on a 50-50 basis, but that is not mandatory. I have seen property held in any percentage. What is important, however, is that on the death of one tenant in common, his or her interest does not go to the survivor. Rather, that interest must be distributed in accordance with the will of the deceased, or if there is no will, in accordance with the laws of inheritance of the state in which the person died. And the deceased person's estate must be probated. The property interest of the deceased person is held in a state of "limbo" until the Probate Court completes its work. It should be noted that in most jurisdictions throughout this country, if a deed is conveyed to two persons without a description of how title is to be held, the Courts will consider that the property is titled as "tenants in common." Joint tenants: Here, the parties own an undivided interest in the property. In most states, the interest must be equal, although some states have enacted laws to permit an unequal ownership in a joint tenancy. On the death of one owner, his/her interest will automatically go to the surviving joint tenant, and probate will not be necessary. It should be noted that some state laws require specific language in the deed to make sure that the title is really held as joint tenants. Thus, if you really want to avoid probate, it is important that the deed contains these magic words: "joint tenants with rights of survivorship." It should also be noted that while both joint tenants are alive, creditors may be able to attach the interests of one of the joint tenants, thereby forcing the sale of the property. The other joint tenant who does not owe any money to the creditor will receive half of the sales proceeds, but obviously may not be able to keep the property. Additionally, since there is nothing sacred about a joint tenancy, either joint tenant can sever that tenancy by conveying his or her interest to a third party. If that should occur, that third person would end up owning the property as tenants in common with the non-conveying owner. Tenancy by the entireties: This form of ownership is reserved exclusively for husbands and wives. Under a tenancy by the entirety (T by E) arrangement, both husband and wife own an undivided interest in the property. Unless both parties owe money to a creditor, the house cannot be attached. On the death of one party, the entire property will be owned by the survivor, and no probate will be necessary. Thus, if you are married, and clearly want to avoid probate, you should confirm that title to your property is held as "T by E." If you find that the property is not titled as such, you have the right to prepare and record a new deed which would reflect this new arrangement. There should be only a nominal recording fee to accomplish this, and either the Recorder of Deeds or your attorney should be able to assist. This columnist does not want to enter into the political debate regarding same sex marriages. However, when two unmarried persons decide to purchase a house, they should seek advice and counsel from their own attorney as to how title should be held. Some parties wish to leave their share of the house to their partner on their death, while others want their share to go to their relatives. The way the deed is written will control this. If this is not decided before one of the parties dies, it will be too late to make any changes. I have always recommended that when there are two unmarried parties, title should be held as tenants in common. If the parties want their respective partner to have the property on the death of one of them, they should prepare a Last Will and Testament reflecting this intention, and that Will controls the distribution. Should the parties decide to split up, their Will can always be changed. | 
