What's the Process for Adding Someone to the Title of My Property?
When John and Lisa got married, they decided to add Lisa to the title of John's home. What seemed like a straightforward decision led to several questions: Would they need a new mortgage? How would this affect their taxes? What paperwork would they need? Their story reflects a common situation many homeowners face when considering adding someone to their property title.
Before we go further, Let me explain property title in simple, clear terms.
A property title is a legal record that proves who owns a piece of real estate. Think of it like a car's ownership papers, but for a home or land. However, unlike a single piece of paper you can hold, a property title is actually a concept that consists of several legal documents and records that together prove:
- Who legally owns the property
- How the property is owned (sole ownership, joint ownership, etc.)
- Any claims or restrictions on the property (like mortgages or liens)
When you buy a property, the change in ownership is recorded in your province's land registry system (Ontario, Alberta). This record shows the "chain of title" - essentially the history of who has owned the property and when ownership changed hands.
Why Add Someone to Your Property Title?
There are several common reasons for adding someone to a property title. The most common reasons to add someone to your property’s title are:
- Marriage or common-law relationships
- Adding adult children to the property
- Business partnerships
- Estate planning purposes
- Family trust arrangements
The Step-by-Step Process of Adding a Person to Title
1. Review Your Current Title and Mortgage
To add a person or (in some cases), a corporation to the title of your property, you will likely need to engage a Real Estate Lawyer. A Real Estate Lawyer will typically guide you through all the legal aspects and has access to the provincial land registry system to make any necessary to your property’s title.
Before making any changes, your lawyer will need to:
Obtain a current title search to verify ownership details
The lawyer will conduct a title search in the land registry to verify your ownership of the property, including any mortgages, liens or encumbrances that may be registered to your property.
Review your mortgage agreement for any restrictions
If you have a mortgage on your property, you likely have mortgage terms and restrictions. For example, a lender may require anyone on title to also be a party to the mortgage. Your mortgage agreement will state those conditions and your real estate lawyer will advise you accordingly.
Determine the type of ownership you want (joint tenancy or tenants in common)
Property ownership can be structured as joint tenancy, where owners share equal rights and automatic inheritance applies, or as tenants in common, where owners can have different ownership shares and control their portions independently.
2. Legal Consultation and Documentation
After verifying your property’s title and mortgage documents, your real estate lawyer will:
- Prepare the necessary legal documents (deed transfer or modification)
- Review tax implications and legal obligations
- Ensure proper registration with the land registry office
- Address any title insurance considerations, if needed
3. Financial Considerations
In some cases, adding a party to the title of your property, may trigger financial considerations and even tax implications. Your Real Estate lawyer will typically advise on the following topics:
- Potential land transfer tax (varies by province and municipality)
- Title insurance updates or new policies
- Legal fees and registration costs
- Possible mortgage refinancing requirements
- Capital gains tax implications if the property isn't your primary residence, although you may be required to ask your tax accountant for specific financial advice.
4. Registration Process
The actual registration involves:
- Filing the proper documentation with the land registry office
- Paying applicable registration fees
- Updating title insurance policies
- Recording the new ownership structure
Most commonly, all four steps can be completed quickly and efficiently by an experienced real estate lawyer within a couple of weeks.
Common Challenges with Adding Someone to the Title of your Property
Mortgage Lender Approval
Your current mortgage lender may require the new owner to qualify for the existing mortgage.
Begin discussions with your lender early in the process to understand their requirements and possibly explore refinancing options.
Tax Implications
Adding an owner could trigger tax consequences. Taxes can include Land Transfer Taxes (LTT) or capital gains taxes.
Consult with a tax professional before proceeding to understand and plan for any tax obligations.
Title Insurance
Your existing title insurance might need updating. Your real estate lawyer will review your policy with your insurer and arrange for necessary updates or new coverage. You may be required to pay an additional premium or purchase a new title insurance policy.
Best Practices for adding Someone to the Title of a Property
1. Get everything in writing, including agreements between all parties about:
- Property maintenance responsibilities
- Payment obligations
- Future sale arrangements
- Inheritance rights
2. Keep detailed records of:
- All ownership transfer documents
- Tax payments and adjustments
- Insurance policy updates
- Correspondence with all involved parties
FAQs
Q: How long does the process typically take?
A: The process usually takes 2-3 weeks from start to finish, depending on your jurisdiction and the complexity of your situation.
Q: Can I add someone to my title if I still have a mortgage?
A: Yes, but you'll need your mortgage lender's approval, and they may require the new owner to qualify for the existing mortgage.
Q: What's the difference between joint tenancy and tenants in common?*
A: Joint tenancy includes right of survivorship (the property automatically passes to the surviving owner), while tenants in common allows each owner to control their share independently.
Q: How much does it cost to add someone to a property title?
A: Costs typically include legal fees ($500-1,500), registration fees ($70-500 depending on jurisdiction), potential land transfer tax, and possibly mortgage refinancing costs.
Remember, adding someone to your property title is a significant legal and financial decision. While the process might seem straightforward, working with qualified legal professionals ensures the transfer is done correctly and protects everyone's interests.
Looking to add someone to your property title?
Deeded's real estate lawyers can guide you through the process efficiently and ensure all legal requirements are met properly. Contact us to learn how we can help make this transition smooth and secure.
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