transfer tax

[Mike Hummer]

a friend has property in the state of Washington , She has it in partnership with her boyfriend. His name is on title, they just refinaced with her buying down the loan with her money only of $200k. The title or escrow company didnt record her name on the title.She called them and they said the county wants $1600 to put her name on title. Escrow said" since you are not married this is a transfer tax". This was not a sale, just a refinance. the escrow co . told her " pay it if you want your name on title, otherwise your name wont be recorded with the county as a titled owner". I told her to pay the $1600 ,get your name on title then go after the escrow companies errors and omission insurance. Did I give the right advise ?. any suggestions on what she should do?

[Steve Babiak]

Whoever thought putting money into a property without being put on title is where the BAD advice came from. Unless that money was put into this as a loan of some sort, in which case a mortgage or deed of trust would have been recorded to establish that there is a lien being given to the lender.

Transfer tax rules can be set by state, county or locality - so you need to be aware of the exemptions that are available. I'm in PA, the PA Dept of Revenue determines what types of transactions are transfer tax exempt; check the rules for that area to see if there is a possible exemption to having to pay. Otherwise, getting put on title certainly helps to "secure" the money contributed into this property. But if this is a "partnership" of some sort, what does the (written) partnership agreement say to do?