Full question:
We Purchased investment property in both husband/wife names(sales price $47,500); Deed was recorded on 3/7/11; We want to transfer property to our LLC , which is also in husband/wife names; it is a Special Warranty Deed which reads: 'GRANTEE HEREIN SHALL BE PROHIBITED FROM CONVEYING CAPTIONED PROPERTY TO A BONFIRE PURCHASER FOR VALUE FOR A SALES PRICE OF GREATER THAN $57,300 FOR A PERIOD OF THREE MONTHS FROM THE DATE OF THIS DEED. GRANTEE SHALL ALSO BE PROHIBITED FROM ENCUMBERING SUBJECT PROPERTY WITH A SECURITY INTEREST IN THE PRINCIPAL AMOUNT OF GREATER THAN $57,300 FOR A PERIOD OF THREE MONTHS FROM THE DATE OF THIS DEED. THESE RESTRICTIONS SHALL RUN WITH THE LAND AND ARE NOT PERSONAL TO GRANTEE. THIS RESTRICTION SHALL TERMINATE IMMEDIATELY UPON CONVEYANCE AT ANY FORECLOSURE SALE RELATED TO A MORTGAGE OR DEED OF TRUST' Since we are not selling the property; can we Quit Claim it to our LLC prior to the three month period?? If the Quit Claim is 'legal' to do immediately, can you handle this for a fee; can we personally do this; would this cause potential issues explaining that the property was not sold?
- Category: Real Property
- Subcategory: Sales
- Date:
- State: Tennessee
Answer:
Generally, a deed that transfers real property for value is considered a sale. Even if the consideration (value given) is only one dollar, it is still a sale. According to the language you quoted, the deed restriction won't prevent a transfer to a LLC as long as the purchase price is $57,300 or less. A deed is the written document which transfers title (ownership) or an interest in real property to another person. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee) and be signed and notarized by the grantor. In addition to the signature of the grantor(s), deeds must be acknowledged to be recorded and acceptable as evidence of ownership without other proof. A valid deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the county recorder or recorder of deeds in the county in which the real estate is located.
There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record. However, a person who obtains a mortgage is still liable for mortgage payments after executing a quit claim deed on the property securing the mortgage. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title.
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.
