All Forum Posts by: Stanley Bronstein

@Andy Mirza I'm wondering if you could still use a Special Warranty Deed and put language in the deed that states the purpose of the transfer and that specifically says it is NOT arms-length?

In Arizona, we file something called an Affidavit of Value on arms-length transfers OR the deed has language stating it is exempt and explaining why.

That way the assessor knows whether or not to trigger a revaluation on a transfer.

Does California have something similar to this?

@Andy Mirza I'm used to working in states (Texas and Arizona), where there is essentially no transfer tax.

@Andy Mirza It may be normal and the easiest thing to do, but I never recommend to my clients that they use quitclaims for non-arms length transactions such as you describe.

I have an ongoing situation in Texas right now where there are 3 lawyers (I'm one of them) trying to work out a mess caused by a quitclaim deed that would not even be an issue had the parties used a Special Warranty Deed 10 years back when one of the parties was trying to save a few bucks and used a quitclaim deed form they had in their files.

In my opinion, quitclaim deeds are often misused. Quitclaims should only be used to resolve title issues (such as heirship and such) and they should not be used to actually transfer title.

I realize there's more than one way to do things, but I would never counsel a client to use a quitclaim in the situation you describe.

Simply use a special warranty deed and be done with it. It's not really any more difficult and it removes the potential for title insurance issues in the future.

@Andy Mirza - You might find this article interesting - Quitclaim deeds can create title insurance issues.

https://pocketsense.com/quitclaim-deeds-convey-marketable-titles-12134759.html

I would think the insurance policy would be in the name of the owner of the house. If the owner of the property is the LLC, then the insurance will be in the name of the LLC.

@Eudith Vacio - @Mark Ainley is giving you good advice.

@Chris Laino - @Chris K. is pretty much correct. I wouldn't get fancy with choice of location. If you are going to be owning income producing property, the actual ownership entity should generally be registered in the state where the property is located. If you have a lender involved, they're pretty much going to want the ownership entity to be registered in the state where the property is located.

As for your holding company entity (if you use one), lenders will sometimes want that registered in the property state as well (depending on the size of the loan).

 Ah, the good ole days ...

@Toan Hoang Impossible to determine with the limited information you provided.

What does the contract say?

What does the correspondence between the parties say?

During what phase of the purchase did this happen?

How much is your earnest money? If it's a small amount, it's not worth pursuing. If it's a larger amount, it might be.

Bear in mind that you probably need to get an attorney involved and they don't work for free. Make sure you don't throw lots of money at an attorney in the hopes of getting a little bit of earnest money back.

TIP - One thing you might be able to do (depending on the circumstances), if to send notice to the escrow agent (or escrow attorney) that you object to the release of your earnest money. Most escrow agents will then throw up their hands and tell the Seller and Buyer to work it out. In that scenario, you might be able to work out a compromise and get half of your earnest money back.

NOTICE - I am not your lawyer, so you should not take this as legal advice.

Good luck

@Kate Friedrick Excellent. Also, I agree with the recommendation on @Natalie Kolodij