Adding someone to a deed on a house can be a somewhat stressful process as it involves multiple steps and, to be frank, some hoops to jump through. So, it is important to fully understand the intricacies of the process and to have sound legal advice. The state of Illinois has its own rules, as does every state, and it is highly advisable to pay very close attention to each detail as it comes up.
The motivations for adding someone to a deed can stem from a variety of situations. These may include adding a new spouse or a significant other for legal or financial reasons, a desire to transfer ownership of the property to a family member during the estate planning process, transferring ownership as a gift, or for the purpose of co-owning the property with another person or even sometimes an entity such as a business or other type of organization.
Sometimes, a co-owner such as a spouse may pass away, and their surviving spouse may wish to refinance their marital home and in order to do so, they are required to add themselves to the original deed if their spouse who has passed away was the only one on the original deed or title. Whatever the reason may be, below you will find a thorough guide of this process, step by step.
Key Takeaways
Potential Consequences of Adding Someone to a Deed
When someone is considering undertaking a process like changing the deed to their home, it is crucial that they understand the implications of doing so, as they may have an effect on how you can use your property going forward. There may be a variety of legal and financial implications, including possible impacts on mortgage obligations, property taxes, and overall ownership rights.
Various Types of Deeds That Exist
In Illinois, there are several types of deeds that you may choose to (or need to) use. You may require or want a warranty deed, a quitclaim deed, or a special warranty deed. The main difference is the types of warranties and guarantees that the grantor conveys to the grantee. Let’s take a look at each of these:
- Warranty deed: A warranty deed, also known as a general warranty deed, is a type of deed that provides a higher level of legal protection for the grantee (or person to whom a deed is being granted). It often contains broad protections in the form of covenants of title. This means that the grantor (or the person who is giving the warranty deed to the grantee) is promising that they own the title to the property free and clear of any issues, such as a mechanics lien or someone else having a claim to the title. They are basically saying, “I own this property; there is no break in the chain of events that led to me owning it, no one else owns it or any part of it, and no one will come to try to challenge you and try to take it away from you once you have this deed because such a person does not exist in this situation. You are good to go.” If someone does try to challenge your claim after you’ve been granted a general warranty deed, it is easier to fight that claim because you can show that you’ve been made the promise that there should be no issues with your ownership of the property, and you have relied on that promise.
- Quitclaim Deed: A quitclaim deed is when someone relinquishes their ownership right to a property. This can happen when, for example, a pair of siblings inherit a house as equal owners, but only one of them wants to keep the house. So, the other sibling may choose to quitclaim their ownership right to the property to their sibling so that that sibling has full ownership, 100%, of that house. Of course, this is typically done in exchange for something, most often money. This can also happen in the case of a divorce, with one spouse signing over their interest in the marital home to the other spouse by granting them a quitclaim deed. Once a person has executed a quitclaim deed, they no longer have any legal or financial rights to the property they quitclaim deeded.
- Special Warranty Deed: A special warranty deed is different from a general warranty deed in that it does not give the grantee the same level of legal or financial protection. The covenants of title that the grantee receives are not as strong. This means that the grantor is basically saying, “I own this property and I’m conveying it to you, but I do not know if when I was made the owner, there already existed some sort of issue with my ownership of it. Before I owned it, for all I know it may have been stolen by the person who sold it to me, so someone may emerge to challenge your ownership of the property in the future because the background of the title is murky, and I can’t promise you much beyond that I am under the impression that I fully and properly own this property.” The grantor may give you a special warranty deed if they themselves did not receive any type of guarantees when they acquired the property, so legally speaking, they are not able to provide you with any guarantees that they also do not have. A special warranty deed only guarantees that the title is free and clear of any issues only during the time of the grantor’s ownership, but not beyond that.
Ultimately, the type of deed a person may choose depends generally on the level of legal protection they want to convey. This is why it is so important to know and understand the different types and make a choice accordingly.
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Documents Needed for a Deed Conveyance
A deed is a legal document and must conform to some basic requirements. Any time property is conveyed via a deed, a new deed document needs to be drafted. You can try to use a standard form, but the safest way to do this is to use an experienced attorney who understands the logistics. The document needs to provide:
- A legal description of the property in question can typically be found on the current deed or plat survey and can also be found on the County Recorder of Deeds website. This will include information such as the lot number and abutting streets.
- The full legal name of the grantor, who is the current owner.
- The full legal name of the grantee who will be added to the deed.
- There needs to be some “consideration” exchanged between the current owner and the person being added to the deed. This means that there must be some sort of money or value provided. In cases where no money is technically being exchanged, such as with gifts, a very small sum, such as $10, will be sufficient. This is basically a technicality, but it does need to be included.
- Each party, both the grantor and the grantee, must sign the deed for it to be valid. This must be done in front of a notary, and the notary must provide a stamp on the document as proof that the signatures occurred in their presence.
The Filing Process
The deed will only be valid and go into effect once it is filed with the County Recorder’s Office. This must be in the county in which the property is located. The filing process will include a filing fee, and you will also have to submit a copy of the original deed. There are some tax considerations that are important to know and understand as well. This is where it would be especially advisable to seek professional assistance. In Illinois, a Real Estate Transfer Declaration is necessary in order to report the transfer and to figure out what potential tax changes or charges may be needed.
What Comes Next
Once you record your deed, you will get a copy that has been stamped by the County Recorder. You must keep this for your records. The County Recorder will also update the public records to include the new owner.
More documents will need to be updated to reflect the change in the deed. These include:
- A homeowners insurance policy will need to be updated to include the new owner.
- The mortgage lender will need to be notified. There may be accompanying changes to the loan terms, so you may even need to get the mortgage lender’s approval to add someone to the deed. This is important not to overlook.
In Conclusion
As you can tell from the above, there are several important steps to the process of adding someone to a deed. It is therefore crucial that if someone decides to do this, they either pay very close attention to all these details, or, better yet, they seek out the assistance of a professional real estate attorney familiar with and specialized in them.
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