Q: When I was 22, my father purchased a condominium for me. He put it in both of our names. After approximately five years, he paid it off in full.
I have recently been sued both corporately and personally. Approximately one month prior to being served, my father wanted my name off of the property, so I filed a quit claim deed to remove myself from the property and give him full ownership.
A month prior to the hearing, a pending lien was placed on the property by the plaintiff. A final judgment was awarded to the plaintiff. The plaintiff has stated that they intend to proceed with post-judgment efforts, which include filing a motion to go after the condominium now owned by my father. Is this possible?
A: It is absolutely possible. You owned a property with your father. It can be assumed that you owned one-half of the condominium. When you were sued the plaintiff put a lis pendens on the condominium. That is a notice to all that the property you own is subject to possible action due to continuing litigation.
That notice meant that any subsequent owner of the condominium owned would take that title subject to that litigation. If the litigation was successful, any subsequent owner might lose the property depending on the judgment awarded and the value of the condominium.
In your case, you tried to transfer you interest to your father, who paid for the property, thinking that you could shield it from the judgment levied against you. Unfortunately, now that your father owns your half, he could lose that half to the plaintiff in your litigation.
Much more fundamental to your case is the fact that you probably transferred your one-half interest in the condominium to your father without your father paying you for your interest and with your father probably having knowledge of your litigation problems.
When a debtor–that would be you–transfers an interest in property to another person without getting paid, your transfer could be said to be a fraudulent conveyance. Most states recognize that a creditor has the right to go after a debtor’s assets for debts they owe the creditor. If the debtor disposes of his assets to prevent the creditor from getting to them, the law protects the creditor. Those fraudulent conveyance laws would say that the debtor’s transfer of an asset to avoid the grasp of a creditor should be taken away from the person that received them.
Since your father did not pay you for your share of the condominium, when you transferred your share of the condominium to him and received nothing in return, it may be construed by the courts that you were trying to defraud the creditor.
If your father had paid you money for your share and that payment was what you would have received if you had sold your share to a stranger in a good faith transaction, the transfer would not have been fraudulent. However, the cash you received from the sale would then have to be paid to those named in the judgment.
In your case, even if your father had paid you, the litigation notice had already been placed on the property and it was too late to sell the property without adverse consequences once you lost your case.
The only way your father might prevail in his case against the plaintiff is to prove that your name was on title in name only but that your interest in the condominium was minimal. Since you were on title, you had to have owned something. Generally if you own real estate as joint tenants, you and the other tenants are deemed to own the property in equal shares. The question would then be whether you owned the property in equal shares or not.
If you did not own the property in equal shares, you would need to have some documentation to prove your ownership stake in the property. That would be your share that would be lost to the plaintiff. If you can’t prove that you owned something less than the presumptive one-half share, that one-half interest is at risk.
The plaintiff can attempt to have the half interest sold or force your father to pay them off to clear the title.
You would be wise to talk to an attorney about your situation.
July 2, 2008.