Celebrating the Past, Present & Future

ASK PEGGY

Dear Peggy:
    I bought a piece of property last year. I borrowed the money to buy it and I signed a note and deed of trust to the bank. Now, I would like to put my sister’s name on the deed to the property along with mine. Can I do that?

ANSWER:
You can do a deed from you to yourself and your sister. Then you will own it together and she will have as much to say about the property as you do.


However, there is a problem. If you look at your note and deed of trust to the bank, I believe you will find that if you transfer the property, the loan immediately becomes due in full. In other words, you can be forced to pay the entire balance of the loan immediately.

The reason for that provision is to protect the bank’s interest in the property. The property is the collateral for their loan. Should you not be able to pay, they have the right to sell the land to recoup what they are owed.

If you were allowed to transfer the land to someone else without any consequences, the bank could lose its collateral—or in this case, half its collateral.

It is possible that you could make the new deed and if you continued to make your payments, the bank would never know. I don’t advise taking the chance.

The bank might be willing for you to add your sister as an owner if she also signed a new deed of trust. That way, the bank would still have access to their collateral.

The only way to find out is to ask.

If you have a question, write Peggy Evans Garland at P.O. Box 905, Montross, Va 22520, call 804-493-0281 or email me at peggarla@aol.com