Q: I bought a condo in Chicago. I want to put a family member on the deed. I was told that Illinois law does not allow me to put a family member on the title to the condo unless the person is also on the loan. Is this true?
A: No. You can add anybody you like to the title to your property subject to a couple of rules that generally apply everywhere.
If you own a condominium, your condominium association may have rules that prohibit you from adding a person to the title to your property without the board’s consent. The condominium board can treat the transfer of your share of the property to a family member as a sale that can require its approval. The same might be true for a co-op board, since co-ops are often quite persnickety about approving owners.
If you add someone to the title of the property, your lender might have the right to call the loan due under the loan documents you signed when you purchased or refinanced your property. Just about every residential mortgage has a clause that states that in the event of a transfer or sale of the property, the lender has the right to require the repayment of the loan in full. That clause is generally referred to as the “due on sale” clause.
The due on sale clause doesn’t mean the lender will call your loan, only that it has the right to do so.
In some circumstances, there are laws that permit you to transfer title to your property to a spouse or other relative including the death of a person on title. If you fall within these exemptions, your lender would not be permitted to enforce the due on sale clause on you, but your association laws may be another matter.
You should know, however, that your lender would require everybody on title to sign any future mortgage that affects the property. So if you refinance, don’t be surprised if the lender requires you and anybody else on title to sign the loan documents.