Deed Transfers

Deed Transfers Between Acquaintances: Ensuring Every Detail is Legally Sound

Transferring property is a significant legal matter requiring intensive attention to detail, an in-depth understanding of real estate law, and a knowledge of your rights and responsibilities. When you’re transferring property between friends or acquaintances, it’s common to hit some bumps in the road. People may expect you to bypass important steps or cut corners to save money, even when doing so is not in your best interests. It’s important to understand what a deed transfer entails and how you can protect yourself at every turn.

An Overview of Deed Transfers

A deed transfer is a legal transfer of ownership between parties. It’s more common to see deed transfers between strangers during conventional real estate sales. But when property is gifted or sold between acquaintances or family members, these transactions may be a bit more casual and relaxed in nature. This doesn’t mean, though, that you can be lax about legal requirements and protocols. Common types of deeds involved in transfers include:

  • Quitclaim: A quitclaim deed involves a party with an ownership interest in a property disclaiming that ownership interest and granting it to another party.
  • Warranty: Warranty deeds are utilized when real estate is sold. They transfer ownership from the grantor to the grantee.
  • Special warranty: This type of deed is similar to a warranty deed in that it transfers real estate from a seller to a buyer. It only offers a limited guarantee and leaves the buyer responsible for any liens or claims against the property.
  • Gift: Gift deeds transfer property rights between parties without any exchange of money or assets.

Legal Requirements and Regulations

Deed transfers are complex and governed by strict legal requirements and regulations. It’s common for a layperson without any background in real estate to miss crucial forms or steps when navigating a transfer on their own. Grantors and grantees must fill out the proper forms, file those forms properly, and account for any taxes or fees incurred by the transfer.

In Maryland, a deed transfer requires a Maryland State Intake Sheet. Applicants must also submit a lien certificate with their deed, otherwise it will not be processed. Deed transfers with agricultural use have to be approved by the Maryland Department of Assessments and Taxation.

Fees vary, depending on which county you live in. In Anne Arundel County, for example, the recordation tax rate is $7.00 per thousand, rounded up to the nearest $500. The county transfer tax rate is 1% for transactions under $1,000,000. Transactions for $1,000,000 or more incur a transfer tax rate of 1.5%.

Key Details to Check Over

Details are everything when it comes to deeds. Incorrect or missing details can mean having to redo the forms—and that’s the best possible outcome. The worst outcome is a dispute between the new owner and the neighbors, potentially resulting in legal action against the new or previous owner. Per Maryland law, a deed must include an accurate description of the property, the names of both the grantor and grantee and the consideration. The consideration is the purchase price for the property; if there is no money changing hands, the deed will state that there is no consideration.

Accuracy is of the utmost importance in deed transfers. Using vague or incorrect language can result in a deed that means something entirely different than what you intended.

Another important detail to check is the lien certificate. In many counties, you are required to have a lien certificate for the property. This outlines any unpaid taxes or liens on the property that must be paid prior to recording.

Execution and Recording

Before signing any legal documents, ensure that you check the requirements. If a form must be notarized, signing it outside the presence of a notary means that you will have to redo the form. Once the paperwork is complete, the parties involved can pay the recording fee, bring the original deed and new deed to the Division of Land Records, and submit all of your paperwork. The deed will be mailed shortly after everything is processed.

Whenever you’re navigating a legal issue or document, it’s always recommended that you consult an attorney. Even if you’re just transferring property between yourself and someone you trust, ensuring that everything is done properly is worth the time spent meeting with an attorney.