Domestic Partner, Quitclaim Deed, & Mortgage

Don't pursue a quitclaim deed without understanding all the implications.

My domestic partner and I are splitting up and we own a home together. He wants me to sign a quit claim deed but refuses to refinance and our lender won't take me off the loan because we have a second mortgage. My 1st question is, is there anything an attorney can right up that keeps me on the title but states that moving forward, I have no right to occupy or rent out the property? if I do sign the quit claim deed and he dies w/out me on the title, will I be responsible for the debt?

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Highlights


  • A quitclaim deed transfers ownership rights in a property, but it does not mean the property has no liens on it.
  • Your financial responsibility for a mortgage does not end, if you quitclaim.
  • Consult with an attorney when jointly owned assets can't be divided by mutual agreement.

Thank you for your question about your mortgage, your home, and a quitclaim deed.

There are at least three separate issues present in your question:

  1. Your rights to the property
  2. The domestic partnership
  3. Your obligation for the mortgage debt.

Domestic Partnership

A domestic partnership is a type of legal relationship between two people who are not married, but enjoy the rights, protections, benefits, responsibilities, obligations, and duties that normally fall only to married people.

The rules for domestic partnership apply in some jurisdictions to both same-sex partners and to male-female partnerships. In other jurisdictions, they only apply to male-female partnerships. Domestic partner benefits can be set by a state, city, county, or by individual employers.

The federal government does not recognize domestic partnerships, aside from some limited recognition for federal employees.

California domestic partnership law has very broad provisions, making a domestic partnership a virtual marriage. Because the rules vary in different jurisdictions, it is important to do your homework to see if you are eligible for a domestic partnership and what the rights and responsibilities are in your jurisdiction.

Quitclaim Deed

A quitclaim deed is a legal document that conveys one person's interest in a property to another person. The deed indicates that the title is conveyed from the grantor (transferor) to the grantee (transferee).

Although it is not an issue in your case, anyone who has property rights transferred to him or her through a quitclaim deed should be aware that it does not guarantee that the grantor holds the legal rights of ownership. The quitclaim deed also does not guarantee that the property being transferred has a clear title, or that the title is free of liens.

In your case, you would transfer your interest in the property to your ex-partner, leaving him with full ownership rights to the property. This can be done quickly and at low cost, but you should consider if it is in your interest before you file a quitclaim deed.

Financial Responsibility

The quitclaim process is between you and your ex-partner. It has no relation to the mortgage loan the two of you jointly hold with your lender. Regardless of your ownership rights in the property, you are responsible for the mortgage financially.

You continue to be responsible for the mortgage, although if the mortgage is paid as agreed, the impact on you would be minimal. If your ex-partner ends up not paying the mortgage on time, it will show on your credit report and lower your score. Whether he dies or lives, you are responsible for the mortgage until it is paid off via a new loan (refinance) or the home is sold.

The joint mortgage with your ex-partner could also pose a problem, were you to apply for another mortgage. At that time, the new lender would see on your credit report that you have another mortgage in your name. The new lender could count the monthly payment on your old home as part of your debt-to-income ratio, making it hard to qualify for the new loan. This is another reason for you to seek a way to get yourself off the mortgage.

Is there any equity in your property? If so, the cleanest solution is to sell the home and divide the proceeds. Can your ex-partner buy you out, paying you a share of the equity to have you quitclaim your interests? If he cannot pay you a lump sum, maybe you can have an attorney write a contract for your ex to buy out your interests over time? If there is no equity or one of you will not agree to sell the home, there may be no good solution.

You did not specify why your ex is against refinancing the loans into his name. Could he qualify for a refinance loan, if he wanted to? He may be against refinancing because he thinks other options are available that will get you off the property and protect your rights, but they may not exist.

Don't quitclaim your interest in the property, while you remain financially responsible for the mortgage. If your ex changes his mind and decides to refinance, you can quitclaim your interest in the property, but do not do so without first having him sign a contract that he will refinance the loans, once you convey title.

Does your ex-partner have the ability to make the payments on the first and second mortgages on his own? If not, the mortgage will go delinquent, affecting both of you. That gives you both an incentive to find a mutually satisfactory solution. If he can pay both mortgages, he may prefer the status quo, although that leaves your ownership stake in tact.

Consult With a Lawyer

Consult with a lawyer. I imagine a lawyer may write a contract that keeps you on title, but restricts your rights to the property, although I am not sure that this would benefit you. Due to the complexity of the issues involved and the multiple scenarios possible, I recommend you seek counsel of a divorce lawyer.

A lawyer is knowledgeable about the various options available for dividing shared assets when a relationship dissolves, including a domestic partnership. The divorce attorney can recommend a different attorney to write up a contract limiting your rights to the property, if you decide that course of action serves your interests.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

10 Comments

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  • 35x35
    Feb, 2012
    Regenia
    My friend has been divorced 6 years. He signed a quit claim deed to his home and his ex-wife was supposed to make the payments. There was never a provision in the divorce decree for her to refinance to get his name off the mortgage. It just states she assumes all financial responsibility. Since the divorce, she has filed Chapter 13 bankruptcy (didn't make the payments), and last year she was able to get a home loan modification without his knowledge or signature. The modification has extended his obligation under the original mortgage. Again, she is not paying the modified payment on time. How was granting her a loan modification on the original mortgage without his knowledge or signature even legal? Does he have any options other than the 4 you have previously listed?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      Courts are loath to modify home loan contracts, and I doubt a court would do so here. Tell your friend to consult with a lawyer who has family law or civil litigation experience about filing an action against the spouse to sell or refinance the property in a certain period of time.
      0 Votes

  • 35x35
    Dec, 2011
    Jill
    I live in a condo and the association by-laws set out that only property owners are allowed to own. I would like to quit claim my condo to my friend as joint tenants with right of survivorship. I understand I will be responsible for the mortgage. I believe this is a legitimate transfer, correct?
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      I think what you mean is the condo rules require each unit’s resident be that unit’s owner. As you imply, the real property’s title defines the bundle of rights that we call ownership. Generally speaking, the quitclaim you described would transfer the ownership from you to the other party.

      There are two tricks to your question. First, I have not read your condo rules, and the writer of the condo rules may have thrown in a provision in the rules that require any mortgage on the property be in the resident-owner’s name. Therefore, take all of the documents relating to your condo, including mortgage, title, HOA rules, and covenants appurtenant, to a lawyer in your state who has real property experience. He or she will answer the technical part of your question. Second, ask this lawyer if your plan is in your best interest legally. Presumably, your friend is promising to pay your mortgage. What if he or she does not? Or abandons the property? Or dies? Or sells their interest to someone else? You are leaving yourself open for a liability here that you need to address. The lawyer you meet will discuss your options.
      0 Votes

  • 35x35
    Dec, 2011
    Jan
    I am divorced. I did a Quit Claim Deed and signed the house over to my ex husband. He is defaulting on the loan and has not made a payment in over a year. My credit continues to suffer because of what he is doing. He is upside down on the house and can not refinance. Foreclosure proceedings have begun, but I have no idea how long it will take. I am desperate to get my name off of the loan. Reading these posts I see that if I file bankruptcy then my name will be taken off of the loan. Is that correct? I figure a bankruptcy will be less damaging to my credit then waiting to see what happens with the house and the loan. From what I understand from the mortgage company he was working on doing a loan modification, but has not made the modified payments either. He has recently remarried and I don't want to be caught in a mess since his new wife might be on the deed as well. I understand that she has filed for bankruptcy at least 3 times previously and if he does it to get out of the house loan, then they will come after me. He has never disclosed to me that he is not making house payments. Can I claim bankruptcy and get my name off of the loan and start rebuilding my credit?
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      If you qualify for a Chapter 7 bankruptcy, then you can remove your financial responsibility for the mortgage loan debt. I recommend that you consult with a bankruptcy attorney as soon as possible.
      0 Votes

  • 35x35
    Oct, 2011
    Renee
    I was engaged, we bought a home together, deed & mtg. in both our names but bridge loan in his name only. I have been living in the home since we purchased it and paying the intrest only note. He has never lived in the house, nor in this town, and is now wanting me and my two small children to move out or buy the house from him. We both put money in for the down payment & closing cost, and I have no clue on what to do. I love this house and would like to try and keep it. Can he add me to the loan and then in 18 mo (when bridge loan is up), I refinance solely in my name??? We bought the house for $339k, put down $35K, and the bridge loan is for $305K. I have no clue what my options are and really need some help.
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      You need more assistance than I can provide via e-mail or a Web posting. Consult with a lawyer in your state who has real property or contract law experience to learn your rights and liabilities regarding the loans. Also, the last sentence in your message indicates you would be well served by an advocate who can assist you in your negotiations with your ex-fiance.
      0 Votes

    • 35x35
      Nov, 2011
      sue
      I got divorced in 2005 and now my ex wants 40% of any net profit of which there is none according to a market analysis. Will a quick claim deed signed by him and the fact that I can refinance with my current lender get him off any further obligation to me? I wish to stay in the home and have been making all the mortgage payments on time since 2005.
      0 Votes

    • 35x35
      Nov, 2011
      Bill
      He could cede his rights to the property by signing a quitclaim, but he may have no desire or incentive to do so. You can't refinance in your name only, without his consent, if he is on title.

      Did the terms of your divorce decree specify how the property was to be divided? If he has no legal compulsion to cooperate with you, you may have to negotiate for his cooperation by offering some money or asset to sway him.
      0 Votes