Google
Think Glink
Web
 
Articles by Ilyce
Untitled Document

Real Estate Taxes: Can a Quit Claim Deed Change Who Pays?

REM #LAW823

By Ilyce R. Glink and Samuel J. Tamkin

Summary: A father transferred his home to his children using a quit claim deed. He agreed to continue paying real estate property taxes but stopped. Now his children have been notified they're behind on real estate taxes and could lose the property. One child wants to sign a quit claim deed to transfer ownership back to the father. Will this shift responsibility for the real estate taxes? Sam and Ilyce advise to first talk with the father and trying to work something out to save the home.

Q: Several years ago my father deeded his home to me and two of my siblings. Our understanding was that he would pay the real estate taxes and the insurance premiums. The mortgage on the home has been paid off for some time, and my father still lives in the house.

We've just found out that my father has not been paying the taxes on the house and back taxes are owed. Because the house is in our names, the tax office is coming after us. My siblings and I want out, and want to do a quit claim deed back to our father.

My question is will this relieve us of the back tax responsibility? Or will we still be responsible for the back taxes owed?

A: Once you accepted the property from your father you and your two siblings became owners of the home. Now that your father stopped paying the real estate taxes on the property, it's up to you and your siblings to pay those taxes or lose the property.

Doesn't the property have some value to you and your siblings? If you and your siblings don't pay the taxes, you stand to lose the property. Of course, if your father has the money to pay the taxes, he could. But if he doesn't and you don't, the property can be sold out from all of you and someone else will become the owner of the property.

Your father will lose a place to live and you and your siblings will lose whatever value the property has. If the property has value, you could sell the home to pay the taxes off and then distribute the proceeds from the sale. However, you seem to be in a delicate position. Your father gave you the property with the understanding that he would pay the taxes. But he did not pay those taxes. What reason does your father have for not paying those taxes?

If your father failed to pay the taxes due to ill health or financial problems, it would seem that he did not mean you and your siblings harm. You could try to help him out and pay the real estate taxes that are owed. Eventually, when you sell the property, you and your siblings will get the benefit of the gift that your father gave all of you. If the home has appreciated in value, you will all have some money to show for keeping the property and later selling it.

You'll need to sit down with your father to discuss the issue of non-payment of taxes and what his financial expectations are going forward. If the property is unaffordable for everyone, then selling it might be the best solution.

NOTE: Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink's latest ebooks are "The Clutter Collector: How to Get Rid of Clutter Everywhere in Your Home" and "How to Save $50 a Month," which are available at her all-video website, www.expertrealestatetips.net. If you have questions, you can write to Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce's website, www.thinkglink.com. © 2008 by Ilyce R. Glink. Distributed by Tribune Media Services.

Thinkglink Popular Stories...

Quit Claim Deed Transfers Property Taxes
Quit-Claim Deed Question
Quitclaim Deed Does Not Change Mortgage
Second Marriage Financial Issues Include House Deed
Property Inheritance Saves More Taxes Than Quit Claim Deed

Link to This Article

Like what you've read? Spread the word! You can link to this article from your website by copying the following code and adding it to a page on your website:

 

Ilyce
Ilyce

  • Recommended Stories..
  • Refinancing With Poor Credit Score
  • Building Out Your Closet on a Budget
  • Buying a House with Bad Credit
  • Buy Rental Property With Home Equity Loan
  • Bi-Monthly Mortgage Payments
  • Looking At A Seller’s Closing Costs
  • Retirement Accounts Questions
  • Capital Gains Tax Question
  • How Do Reverse Mortgages Work?
  • WGN-TV Show Notes -- February 28, 2001
  • 1031 Exchange to Avoid Capital Gains Taxes
  • Loan Qualification Question
  • Dealing with Synthetic Stucco Homes
  • Buying A Used Car
  • Tenants By The Entireties
  • 401(k) Open Enrollment
  • Creditors "Charged Off" Credit Account
  • How Do Reverse Mortgages Work?