The simple answer to how do I transfer ownership of property is through a deed. A deed is a legal instrument that is used to transfer ownership of real property. This deed is recorded in the county or city recorder’s office, and puts the entire world at notice that the grantee in the deed is the new owner of the property. Who is the grantee? The grantee is the one receiving the property, while the grantor is the one giving or conveying the property.
Types of deeds
A grantor wonders, how do I transfer ownership of property, when he is either selling a peroperty, giving it away to his children without any compensation or transferring it to a living trust. When considering what type of deed to use, it’s important to consider what kind of guarantees or warranties does the grantor want to be responsible for to the grantee when the property is transferred.
For example, if you are the grantor and you’d like to guarantee that you have not sold the property to anyone else, that the property is not burdened by any encumbrance apart from what you have told the buyer about; and that you warrant and defend the title against the claims of all persons, then a warranty deed will be executed. If you are simply conveying your interest without any guarantee, a quitclaim deed is more appropriate. If you’d like to guarantee that you have title, without guaranteeing that such title is free from defects or encumbrances, then a bargain and sale deed will be executed.
In New York, a bargain and sale deed is more common, but in order for it to be more acceptable to a buyer, it is coupled with title insurance. The title insurance company carries the risk of delivery of good title and guarantees the property from title defects to the grantee. The quitclaim deed, on the other hand, is more common in transfers without any consideration, such as transfers to an ex-spouse due to divorce, transfers to children, or transfers to a living trust.
Considerations before drafting a deed
When you begin the process of transferring ownership of property, it’s important to remember the following: (a) secure latest deed from county clerk or city register’s office to see who the owner is; (b) ensure chain of title by using the same names, as reflected in the previous deeds; (c) review previous deeds to determine ownership interests of grantors; and, (d) ensure proper authority when dealing with business organizations.
Securing the latest deed from the county clerk or city register’s office will verify who the real property owner is. It ensures that the person you are speaking with and who is selling the property is legitimate. Buying real property is a major investment. It is important, when parting with hard earned cash and in order not to waste time, to ensure that the person you are dealing with can really transfer ownership of the property.
Once you have verified that the person you are dealing with is the grantee in the latest deed from the city register’s office, prepare the deed, based on the types of guarantees the buyer and seller are comfortable in making. Generally, in New York, a bargain and sale deed coupled with title insurance is the more acceptable manner in cases of transfers with substantial consideration, such as between a buyer and a seller. Ensure that the names in the latest deed are the ones used in the new deed. For example, in the latest deed retrieved from the city register’s office, the grantor was John A. Smith and the grantee was Linda B. Jefferson. In the new deed, use the name Linda B. Jefferson as the grantor and not Linda Jefferson. If, for example, Linda B. Jefferson has married and now goes by the name Linda B. Jones, write in the deed, Linda B. Jefferson, now known as Linda B. Jones. Do not write the new name without referring to the old name in the previous deed. This will ensure that the identities of the grantee in the previous deed and the grantor in the new deed are one and the same, and the chain of title is not broken.
It’s also important to review the previous deed to determine ownership interests. In New York, two owners can own the property either as tenants in common, joint ownership with rights of survivorship, or tenancy by the entirety, reserved only to married persons. The grantees in the deed and the interests they convey will depend on the type of ownership they possess.
When the property is owned by a business organization, such as a corporation, limited partnership, or LLC, it’s important to verify that the person signing the deed has authority and capacity to transfer the property.
Once these issues have been considered, you can now begin the process of transferring ownership of property to the grantee.
Forms and taxes
When asking, how do I transfer ownership of property, it is inevitable to ask more questions such as what forms are required and how much taxes one must pay for the transfer. Generally, the taxes will depend on any gain you received which is computed by subtracting the acquisition cost from the selling price. All real property taxes should be paid prior to transfer as well. In New York, TP-584 or TP-584-NYC has to be filed which is the combined real estate transfer tax return. This tax return will compute the taxes due to the New York government. This should not be confused with the capital gains tax that is paid to the federal government, which is filed in a separate return. After TP-584 is filed and taxes are paid, Form RP-5217, which is the Real Property Transfer Report, is filed. Only upon filing with the county clerk or city register’s office is the public given notice of the transfer and the new owner.
Although transferring property ownership may sound simple, it is always best to get the advice of a lawyer familiar with real estate to ensure that no mistakes are made in transferring property, which is a major investment. Should you need assistance, we, at the Law Offices of Albert Goodwin, are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at email@example.com.