Many clients contact me wanting to add or remove someone off the title to a #property. This may be because of a #marriage, a separation/divorce, or something else altogether.
Unfortunately, it’s not just a matter of going down to the Land Titles Office and signing a Transfer of Land to put the property into the name of the other person or add another person/people or remove a person/people.
If there is a #mortgage in place, the lender/#bank must approve this transfer. You might say, well, I’m adding another person, so shouldn't be automatic because we make more money than I do alone? That’s not the case, as that second person may have a lot of debt, therefore making them unattractive to the lender. The lender must qualify the new person being added or qualify the person alone if someone is being removed. If you can’t qualify alone, then unless someone else is stepping up to the plate to join you on the title/be liable to the bank, it’s unlikely that the transfer you want will take place.
Secondly, and whether or not there’s a lender in place, you want to consult your accountant, as on the transfer of land (bill of sale), you must indicate what the amount is being paid to transfer the property from Person A to B or Persons A + B to Person A alone, etc. Whether or not the dollar amount indicated is actually paid or not is not the key; and typically $1.00 plus love and affection or “pursuant to a separation/divorce/settlement” may do the trick; however, your accountant and your specific situation must be assessed to confirm what must be indicated.
As lawyers, we shouldn’t be giving tax advice, unless you are a tax #lawyer, and even then, involving your accountant is generally best practice.
So, the next time you decide you want to add or remove someone, consult your lawyer, lender, and accountant and ensure that everything is done right!
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