Transferring property title in Arizona can be a complex and sometimes confusing process. Whether you’re buying or selling property, or simply transferring ownership to another party, it’s essential to understand the legal requirements and procedures involved. In this post, we provide five key tips on how to transfer property title in Arizona that any property owner should know.
Remember that these guidelines can never replace the advice of experienced, qualified legal counsel. It is always wise to seek the advice of an experienced real estate attorney to ensure that you are following the appropriate process.
Tip #1: Research the specific requirements for property title transfer in Arizona.
The laws governing property title transfer vary by state, so it’s essential to understand the specific requirements for Arizona. In the Grand Canyon State, there will always be a deed used to transfer property title:
There are three main deed forms named after the warranty of title they offer:
- General Warranty Deed Form: This deed provides the most protection to the grantee by giving a full warranty of title. As it relates to the grantor, this guarantees free and clear title to the property; the right to convey the property; and the legal responsibility for all claims related that may arise that are related to the property’s title. It’s important to note that these claims can also include claims made by previous owners of the house, too.
- Special Warranty Deed Form: Similar to a general warranty deed, this deed makes the grantor responsible for title problems that arose while they owned the property, but not for issues related to prior owners.
- Quitclaim Deed Form: A quitclaim deed does not provide warranty of the title. This means that the grantee will be accepting the property in “as-is” condition. Furthermore, it also warrants that the grantor is not able to be sued by the grantee should there be an issue that arises with the title at a later time.
The state of Arizona also has recognition for other deed forms, which are commonly used for probate avoidance. These include:
- Beneficiary Deed: This newer deed form is designed to avoid probate by naming a beneficiary to inherit the property at death. The owner retains control during their life and can change their mind at any time. It’s also known as a transfer-on-death deed or TOD deed.
- Life Estate Deed Form: An older deed form developed to avoid probate at death, a life estate deed forfeits control over the property during life. The grantor can retain the right to use the property, but cannot sell, mortgage, or deal with the property without involving the new owner.
Tip #2: Ensure that the property is free of liens and encumbrances.
Before transferring title, it’s crucial to make sure that there are no liens or other encumbrances on the property. These can include unpaid taxes, outstanding mortgages, or other debts, and can affect your ability to sell or transfer the property.
Common types of liens that may be placed on a property include:
- Mortgage liens: A mortgage lien gives the lender the right to foreclose on the property if the borrower fails to make their mortgage payments.
- Tax liens: The government can place a lien on a property if the owner fails to pay owed taxes, which gives them the right to sell the property to pay off the tax debt.
- Judgment liens: If a property owner loses a lawsuit and is ordered to pay damages, the winning party may place a lien on the property to secure payment.
- Mechanic’s liens: A mechanic’s lien is a legal claim against a property filed by a contractor or subcontractor for unpaid work or materials.
- HOA liens: Homeowners associations (HOAs) can place liens on properties for unpaid fees, fines, or assessments.
While many properties typically have a mortgage lien that is simple to navigate when transferring title, other liens can become obstacles during the transfer process.
Tip #3: Use a licensed escrow agent.
Using a licensed escrow agent when transferring property title is essential because it helps ensure that the transaction is handled legally, accurately, and securely. Escrow agents act as neutral third parties that retain documents and allocate and disperse funds, acting on behalf of both the seller and the buyer during a transaction involving real estate or real property. They play a crucial role in ensuring that the terms of the transaction are met and that all parties involved receive what they are entitled to.
There are several reasons to involve a licensed escrow agent when transferring property title in Arizona. For starters, licensed escrow agents are required to follow strict legal and ethical guidelines and are knowledgeable about the title transfer process. They can ensure that all steps are taken and that the buyer and seller are both protected in the secure transaction. Additionally, a licensed escrow agent has the expertise to review and understand complex legal documents, such as purchase agreements, deeds and title reports. They can ensure that all the paperwork is accurate and complete, preventing potential issues that could arise in the future.
Tip #4: Consider working with an attorney.
While it’s not required to work with an attorney to transfer property title in Arizona, it can be beneficial. Working with an attorney when transferring property title can provide legal guidance, ensure that the transaction is handled correctly and protect against any future issues, should they arise. An attorney can help with tasks such as reviewing legal documents, conducting a title search, negotiating with the other party and addressing any legal issues that may arise during the transaction.
Additionally, an attorney can provide legal advice on the tax implications, property rights, and other legal considerations. Overall, working with an attorney can help ensure that the transfer of property title is legally sound and can provide peace of mind for both the buyer and the seller.
Tip #5: Keep all necessary documentation.
Last but certainly not least, it’s essential to keep all necessary documentation related to the property title transfer, including deeds, title insurance policies, and any other relevant documents. First, it serves as evidence of ownership and can help prevent disputes. Second, it provides a clear record of the terms and conditions of the transaction, which can be helpful if questions arise later. Third, it may be required by lenders, title insurance companies, or other parties involved in the transaction. Finally, some documentation may be necessary for tax purposes, such as recording the sale price of the property.
Keeping documentation will help protect your interests in the property and ensure that you can prove ownership if necessary in the future.
Hiring an Experienced Real Estate Attorney in Arizona
If you are transferring property title in Arizona, you’re going to want to seek legal advice. An experienced attorney can help you understand your rights and obligations and can represent you throughout the process.
When hiring a real estate attorney, it’s best to choose someone who is knowledgeable about Arizona real estate law and who has a track record of success. Gottlieb Law has significant experiences with the challenges of navigating property title transfers in Arizona. Contact us today at 602-899-8188 to schedule an initial consultation or make an appointment online.