Most commonly in Ohio, one party transfers title to or an interest in real property to another party through a written document called a deed. There are a few situations, however, such as when the government uses its eminent domain power to acquire private property for a public improvement, where a court may order the transfer of real estate without a deed. Also, in rare cases, title may be transferred as the result of continuous possession by a person other than the owner. Ohio law requires a transfer of real estate to be in writing.

What must a deed contain?

A deed must:

identify the current owner (“grantor”) and the new owner (“grantee”);
specifically describe the land to be transferred (a street address is not enough; a legal description is required); and
contain language saying that the grantor “grants” the property to the grantee.

The grantor must sign the deed in front of a notary public or another authorized officer, who will acknowledge the signing of the deed.

The title to my house is in my name alone. Will my spouse have to sign the deed when I sell the property?

Yes. Ohio law gives your spouse what is known as “dower” rights, which means that after your death, your spouse may claim an interest in the property even though you have sold it, and even though your spouse’s name does not appear in your deed. Your spouse must sign the deed to the buyer to clear the dower interest from the title.

“While it is generally wise to record your deed, Ohio law does not require a deed to be recorded for title to pass from you (the grantor) to a grantee.”

If I want to transfer my property to someone else, must my deed to the property be recorded with the county recorder’s office?

While it is generally wise to record your deed, Ohio law does not require a deed to be recorded for title to pass from you (the grantor) to a grantee. To transfer title, you must deliver the executed and acknowledged deed to the grantee. This means that you must give up control over the deed during your lifetime and intend to transfer title to the grantee. To complete the transfer, the grantee must accept the delivered deed. If the deed benefits the grantee, acceptance ordinarily will be presumed, but if the deed is not recorded in the county recorder’s office where the property is located, the grantee may risk losing the property to a subsequent buyer. The subsequent buyer generally will not have legal notice of the transfer unless the deed is recorded.

Let’s say you, the property owner, give a deed to Buyer A, but Buyer A does not record that deed. Later, you deed the same property to Buyer B (who pays for the property without knowing about the deed you gave to Buyer A). Because Buyer A’s deed was not recorded, Buyer B will not have legal notice of the deed to Buyer A. If Buyer B records the deed, Buyer B may be considered the new owner.

What is a quitclaim deed, and how does it differ from a warranty deed?

A quitclaim deed transfers whatever title the grantor may have without giving the grantee any assurance that the grantor has any title to the property. A parent who gives a parcel of real estate to a child might use a quitclaim deed, because the child likely will trust the parent’s title.

In a warranty deed, the grantor promises (“covenants”) that he or she is transferring title free of liens and other encumbrances. Ohio law recognizes: 1) general warranty deeds covenanting against all lawful adverse title claims and 2) limited warranty deeds covenanting only against adverse claims created by the grantor.

Can I sign a deed so my house can be transferred automatically when I die?

Yes. You can sign a survivorship deed, which transfers the title to yourself and at least one other person named in the deed. When you die, your interest will transfer automatically to the other person if he or she is alive. For example, if you and your spouse sign a survivorship deed to your house and you are the first to die, title will pass to your spouse without going through your probate estate. You can also sign and record a transfer-on-death designation affidavit identifying one or more beneficiaries who will receive the property when you die. Unlike a survivorship tenant, a transfer-on-death beneficiary does not have an interest in the property until your death. Also, you may revoke a transfer-on-death designation before your death by signing and recording a new affidavit.

Articles appearing in this column are intended to provide broad, general information about the law. This article is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney.

Ohio Land Contract vs. Lease Option

Is my agreement a land contract agreement or a lease with option to purchase agreement?

The issue of whether your legal agreement is a land contract or a lease with option to purchase agreement can come up in various contexts including when you are evicting a tenant or when someone gets hurt on the premises. If you are evicting a tenant, the tenant may try to argue that the lease with option to purchase is really a land contract because if the tenant has made payments for five years or has paid o 20% of the balance of the property then the landlord must resort to foreclosing upon the property and cannot evict a tenant through a typical residential eviction procedure. In other cases a tenant may want to construe a land contract as a lease because the landlord owes the tenant certain duties of care under Ohio Revised Code 5321.04.

Normally you would think that it should be a fairly simple matter to distinguish between a land con- tract and a lease with option to purchase agreement but some grey area does exist. Courts try to first look at the intent of the parties as evidenced by the written agreement. What did the parties intend the agreement to be? In determining that intent, courts look at several factors:

1. the characterization of the document – how is the document titled?

2. the lessee’s rights at the end of the lease term – must the lessee vacate and has no right to owner- ship (lease) or does the lessee obtain ownership at the end of the lease term (land contract);

3. the application of rent to the purchase price – is all the rent applied to the purchase price (land con- tract) or is just a portion of the rent applied to the purchase price (lease with option to buy);

4. the responsibility for payments for repairs, utilities, and taxes – landlord’s responsibility (lease) or tenant’s responsibility (land contract);

5. the nonexistence of a financing statement (lease);

6. whether an option to purchase existed (lease with option to buy).

Courts will also examine other circumstances surrounding the agreement to determine what the par- ties intended. For example, was there a security deposit (typically of one or two months rent) or was there a more substantial deposit given evidencing a down payment? Or was the agreement for a year or less (lease) or for several years (land contract).

Make sure that the terms you negotiate as part of your agreement do not run afoul of the typical char- acteristics of a land contract or lease with option to purchase (depending upon what your intent is) or you may face hurdles you never expected (foreclosure instead of eviction or landlord duties in lieu of seller duties).

Can you transfer by deed a house with a mortage on it?

Can you transfer by deed a house that has a mortgage on it? Most mortgages have a “due on sale” clause. This clause means that whoever gets the home will have to pay the entire balance of the mortgage as soon as it’s transferred. This means the old mortgage has to be paid in full immediately, and the new buyer has to get a new mortgage on the house. Therefore, the mortgage lender must be consulted before making a transfer. Federal law does allow for some exceptions to the “due on sale” clause. Read further on this page for more information. Consulting an attorney is also recommended.

Transferring Real estate to an LLC

Property owners may wish to transfer ownership of their real estate from themselves to a Limited Liability Company. They do so to transfer potential liability from themselves to the limited liability company. Outlined below are the basic steps to transfer real property from an individual to a Limited Liability Company. You will file a quitclaim deed, an affidavit of facts relating to title transfer to an LLC, and a statemen of reason for exemption from real property conveyance fee. Your situation may differ and may require additional steps not outlined below. As always, if you have any doubts or questions, you should consult with an attorney familiar with such transfers.

Whats the difference between deeds?

A quitclaim deed is a legal instrument which is used to transfer interest in real property. The entity transferring its interest is called the grantor, and when the quitclaim deed is properly completed and executed, it transfers any interest the grantor has in the property to a recipient, called the grantee. Unlike most other property deeds, a quitclaim deed contains no title covenant and thus offers the grantee no warranty as to the status of the property title.

Because of this lack of warranty, quitclaim deeds are most often used to transfer property between family members, as gifts, placing personal property into a business entity (and vice versa) or in other special or unique circumstances. An example use for a quitclaim deed is in divorce, whereby one spouse terminates any interest in the jointly owned marital home, thereby granting the receiving spouse full rights to the property.

The ease at which the quitclaim deed can be executed (it requires little more than both parties signing the document and having it notarized where required, and filed with the appropriate governmental agency with the proper fees paid) is partly to blame for the “quick claim” misnomer associated with the deed.

A warranty deed is a type of deed where the grantor (seller) guarantees that he or she holds clear title to a piece of real estate and has a right to sell it to the grantee (buyer). This is in contrast to a quitclaim deed, where the seller does not guarantee that he or she holds perfect title to a piece of real estate. A general warranty deed protects the grantee against title defects arising at any point in time, extending back to the property’s origins.

A survivorship deed is a deed conveying title to real estate into the names of two or more persons as joint tenants with rights of survivorship. Upon the death of one owner, the property passes to and vests in the name of the surviving owner or owners.

Have you ever bought a home or commercial property in any of the following circumstances–where the seller was a decedent’s estate, a receivership, a bankruptcy estate? In each of these situations, the party signing the deed will not be the individual or company that has title to the property but a fiduciary who’s been court appointed to handle disposition of the owner’s property. The executor handling the decedent’s estate, the receiver in a receivership, or the trustee in a bankruptcy estate are appointed by a court having jurisdiction over the property and typically transfer property using what is called a “fiduciary deed.”

Investment Definitions

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Cap Rate

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Cash on Cash Return

Cap Rate

Internal Rate of Return (IRR)

Debt Service Ratio

Pro-Forma

Gross Potential Income vs. Effective Gross Income

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This is for educational use only. Use at your own discretion. We are not attorneys.