Laws and practices:
A common practice in real estate law is called deed transfer. What is a deed transfer? A deed transfer is when you change the name(s) on the deed, which is an instrument of ownership of a piece of property.
I have been requested by many of my clients to do that, mostly either adding or taking off their spouse’s or children’s name on the deed.
There is one issue, however, that is commonly ignored during the transaction; the “No Consideration Affidavit.” The Affidavit explains that the grantor is voluntarily giving up his/her title in the deed and is willingly, and knowingly giving up their rights.
What are the consequences of not having this No Consideration Affidavit?
Story:
Marilyn has been married to her husband for two years. Her husband is conducting business and is afraid that a creditor might come after some business liability, so he does not want to own anything in his name. Marilyn’s husband bought the house before he married Marilyn, so he transfers ownership to his wife after he married her.
Ten years passed, and things did not work out. They are separated and divorced. Years later, when Marilyn wants to sell the house, the buyer’s title company requests a No Consideration Affidavit, to prove that at the time the husband transferred the title to her voluntarily as a gift. For Marilyn to transfer the title to the new owner, she has to get this document signed by her former husband. Otherwise the title company and purchaser will not accept any other document.
The husband refused to sign the document, so Marilyn had to offer the ex-husband a certain amount of money in order to complete the sale of the property.
Resolution:
It is critical for whoever receives ownership from a deed transfer, to be sure to ask for the No Consideration Affidavit and keep it in a safe place. That way, if anyone has any questions in the future, this could be a critical document to prevent an unnecessary delay or loss in a real estate transaction. Sometimes, for estate planning purposes, it is also better to prepare and have a grantor to execute such document.
 |
Jacqueline Huang Huang & Associates, P.C. 6402 8th Avenue, Suite 405 Brooklyn, NY 11220 Telephone: (718) 435-666 Email: jackiehuang@huanglawfirm.com  |
