Full question:
Our son is grant deeding property to my husband and I. Does he have to have permission from the lender since his name is on the loan? Is this a legal and viable transaction? If not, what about being added on the deed since we were the original owners before we deeded it over to him.
- Category: Real Property
- Subcategory: Deeds
- Date:
- State: California
Answer:
When a property owner has a mortgage, transferring the property can trigger an acceleration clause in the loan agreement. This clause may allow the lender to demand full repayment if the property is transferred without their consent. Therefore, it’s important to contact the lender to find out if any restrictions apply to the transfer.
Additionally, if the transfer is made with the knowledge of a potential claim against the owner, it could be challenged as a fraudulent conveyance. Under the Uniform Fraudulent Transfer Act, a transfer is considered fraudulent if:
- It was made with the intent to hinder, delay, or defraud creditors, or
- The owner did not receive a reasonably equivalent value in return and was either:
- Engaged in a business with unreasonably small assets, or
- About to incur debts beyond their ability to pay.
In summary, it’s advisable to consult with the lender and possibly a legal professional to ensure that the transfer is handled correctly and legally.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.