Owners

Here is a situation I would like some opinion(s) on.

Single woman purchases a home in an HOA in 2002. In 2005,she refinances the home, but still is the only individual on title and the Note, even though she recently marries the person she has lived with since 2002. In 2008, she quitclaims the new husband onto the property.

Our CCR's, as well as many others, stipulate that OWNERS shall mean and refer to the record Owner(s), whether one or more persons or entities, of fee simple title to any Condominum which is part of the Property, including contract sellers, but excluding those having such interests merely as security for the performamce of the obligation. The more I read this, the more I feel a Big Mac truck could be driven through.

In my opinion, only a person or persons listed on the Promissionary Note has an obligation to the holder of the Note, as well as and in this case, the HOA. The "grantee" has no legal obligation to pay the mortgage, property taxes or HOA assessments. On the other hand, if the grantor defaults on the loan, doesn't pay their property taxes or HOA dues, liens may be placed on the property and the grantee may lose any interest that they may or may not have thought they had once they were quitclaimed onto the deed.

In my opinion as well as others, an Owner is one that legally has an obligation to perform on the three areas that may be of concern, loan, taxes and dues. In this case, the document recorded with the County Recorder was a Quitclaim Deed to the Deed of Trust. A deed of trust is security for the obligation, which in our CCR's would be excluded. Again, in my an Owner should be on title and on the Note.

I remember a time when I quitclaimed my interest in my property as a result of a divorce. I no longer had interest in the property, but was still obligated to pay the mortgage. I later found out that the ex didn't pay the mortgage and both our credit were screwed.

Richard:

You are placing yourself and your HOA in the position of determining on behalf of the State of California who holds valid title to a piece of real estate. Not your job unless you are a judge in the Superior Court.

If you wish to challenge the spouse's claim of title to the property, the place to do that is in court. While I have doubts about whether a quit claim deed is the proper instrument to add him to the title, bottom line is that the spouse's name is on a recorded deed to the property. Until you can establish standing to contest his title and actually do so, your HOA is skating on thin ice to exclude him as an owner.

A Deed of Trust is not actually a deed; it is essentially a promissory note secured by the real estate. Regardless of whose name is or is not on the note, the lender may exercise his right to foreclose if it is not paid. The deed of trust does not determine ownership. The text you quoted, "excluding those having such interests merely as security for the performamce of the obligation" stands in direct contradiction to your assertion that "only a person or persons listed on the Promissionary Note has an obligation to the holder of the Note, as well as and in this case, the HOA." The lender on the deed of trust has no obligation to the HOA; whatever agreements that the owner and the lender have made are not the business of the HOA.

None of us has an obligation to pay property taxes. We cannot be sued or jailed for not paying property taxes. We just lose the property when the assessor goes through the tax lien process.

Within the context of this discussion, having one's name on a recorded deed. A person who owns a property may add another person without going through escrow. All they gotta do to add another person to the deed is execute a new deed and record it. That makes them the owners of record. "Record," in this case, refers to the public records, not the the HOA's records.

The situation you described is not uncommon: a single person purchases a home with a deed of trust, marries, and adds the new spouse to the deed without adding the spouse to the deed of trust. Since the property was not sold, the due-on-sale clause does not apply and the old deed of trust can continue in effect.

I can think of several reasons for not executing a new deed of trust but most likely is that if the owner tried to refinance in 2008 to the present that she would have found herself under water, owing more than the 2005 refinanced deed of trust for.

Why is all of this an issue for your HOA?

This is actually a very prudent thing to do and an easy way to do it. Should anything happen to his wife he has claim to the property. This has no bearing on the HOA other than he is on the deed and an or the owner of record.

This is such nonsense I think I've/we've been 'punked'.

Richard

Why does he say punked? Well I am not sure but maybe as a Property Manager (you claimed to be) if you do not know the answer and/or how to handle it, it is time for you to return to Property Management School 101. Assuming you ever went there.

Larry,

Thanks for response.

Having worked in the mortgage industry for a number of years, I know the difference between the two instruments.

Actually I could quitclaim title to the husband for his wife's property. Proving I actully had the legal right to do so is much different. That's why I put little faith in a quitclaim deed.

On that we can agree. I think the reason so many people use quitclaim deeds is that is the deed form that they sell at the UPS store.

B.S.

It doesn't matter what "faith" YOU have in a quitclaim deed. What matters is what faith the legal system has in a quitclaim deed. If you have issues with a quitclaim deed, take your argument to court and see how it turns out.