Q: When a deed is signed for the sale of a home before the settlement, and later the loan documents are signed, can someone remove the name on the signed deed without telling the person who signed it or the other person who was supposed to be on the deed?
A: What you seem to be describing would be a situation in which the seller of a home might pre-sign documents for the sale of his or her home. Later, at the settlement of the sale, the buyer would show up and sign the loan and purchase documents. This situation is quite common.
Under most circumstances, the deed conveying title from the seller to the buyer should not be changed by anyone without the consent of the seller and the buyer. Granted, if there is a typographical error or other minor mistake in the documents, those types of changes are usually acceptable.
But if the seller signed a contract to sell his home to several people and the seller signs the deed conveying title to his home to those people, the document should not be changed unless there are extraordinary circumstances. Even with those circumstances, all parties to the transaction should be well aware of the change.
The seller could find himself with problems if he authorizes the change in the document he signed and the change counters the terms of the contract for sale. If the deed was altered with the seller’s permission and one of the buyers’ names is taken off the deed without that buyer’s permission, that excluded buyer might have the right to sue the seller for failing to comply with the terms of the contract.
In some limited circumstances, if one of the buyers is unable to qualify for the loan and the lender refuses to allow that buyer to sign the loan documents or even hold title to the property, it’s possible that the settlement agent, the seller and the buyer at the closing would all agree to remove the name of that one buyer to allow the closing to continue.
You didn’t elaborate in your letter the exact circumstances that resulted in one of the names taken off the deed. If there was no legitimate reason to take one name off the deed, the person that removed the name off the deed might be legally responsible for that removal and the person who lost out of the purchase might be able to sue that person for damages.
In any event, you should seek the advice of a real estate attorney with all the documents in hand to determine if the change was legitimate or not.
Read more about changing the title of your home.