On the one hand, trust deed investing in California is a smart way to build a stable income stream. On the other, it creates an opportunity for commercial real estate developers to acquire and own property.
Also known as a deed of trust, this legal instrument establishes an agreement between a borrower and a lender (investor). The parties agree to have the property’s title held in trust by a third party until the loan is fully repaid. While the investor accrues interest over the loan’s duration, the borrower takes over ownership of the property after paying off the borrowed money.
Read on to learn more about proving ownership after acquiring interest or equity in real estate property.
The Importance of Proof of Ownership
When ownership of real estate property has been transferred to you, it’s vital that you get the proper paperwork to prove it. Being able to verify ownership enables you to exercise or defend your rights to that property in numerous scenarios, including when you wish to:
- Defend ownership in court
- Use the property as collateral for a loan
- Sell or otherwise transfer ownership of the property
- Develop the property
- Rent the property
We’ve compiled a list of legal documents/records that can prove your rights to a piece of property.
A warranty deed is prepared and signed by the previous owner, transferring property ownership to the current owner. The document includes a brief property description and shows the current owner’s name and rights to the property.
An individual (grantor) can use a quitclaim deed to transfer the legal rights to a property to another person. However, this document lacks key guarantees. For example, a quitclaim doesn’t guarantee that no other party has a valid claim to the property.
Bill of Sale
When somebody sells your property, they can issue a bill of sale to prove they transferred the property to you. You can use the document as proof of ownership until you receive a valid title deed.
County Public Records
You can file your ownership documents, including any deed, with the county recorder. This way, your proof of ownership becomes a public record, and anybody can search the local recorder’s office to confirm it. You can buy copies of the deed at any time when you need to show proof of ownership, such as to a bank or potential buyer.
Deed of Trust
Once you’ve acquired the property via a trust deed, you can purchase a copy of the deed at the recorder’s office. The deed of trust shows that you’ll eventually acquire full rights to the property once you’ve repaid the loan. Trust deed investments lenders can also obtain a copy of the document as it registers their interest in the transaction.
A Mortgage Note
When you get a mortgage, you’ll need to sign a mortgage note on the property’s closing date. This document proves that you own the property but with a mortgage lien.
A Satisfaction of Mortgage Letter
You’ll receive satisfaction of mortgage letter from your lender once you finish repaying your home loan. The document verifies that you own the property and that any mortgage-related claims on it are now null and void.
Proving Ownership after Losing a Property Deed
Ownership or equity in a property doesn’t change when the legal paperwork proving it is destroyed or lost. You should still purchase a new copy of your property deed (and have it notarized) if you lose it. Having a copy on hand can save you a lot of inconveniences when you need to prove ownership.
Proving Original Ownership
You may need to prove you’re a property’s original owner in response to another party’s claim. If you’ve been reported as the property owner, you can provide evidence of ownership with copies of key personal documents such as:
- Driver’s license or photo ID
- Social Security card
- Utility bill or driver’s license with the property’s address
- Any document showing your business engagements with the reporting entity can also help
Claiming on Behalf of Others
When the property owner passes on, you can validate your claim to it by providing documents such as:
- Your driver’s license
- Your Social Security card
- The deceased person’s proof of property ownership and ID
- The minor’s birth certificate if you are claiming on behalf of a child
- Legal documents proving ownership if you are claiming as a guardian
- Deceased owner’s death certificate, will, or estate plan documents if claiming as heir
Proving Section 8 Homeownership
The main requirements to prove Section 8 homeownership are:
- A stamped warranty deed filed with the county recorder (It shouldn’t be handwritten)
- The warranty deed must show the instrument number and the unit’s address
- The assessor’s property tax statement (the copy must indicate the property’s address and name of its owner)
Protecting Co-ownership Rights When Unmarried
It’s important that you put ownership details in writing if you acquire property together with someone who is not your legal wife or husband. Living together isn’t co-ownership evidence, and the property may be legally inherited by your partner’s next of kin. It may be possible to validate your claim by signing a domestic partnership agreement.
Joint Tenancy with Right of Survivorship
In California, joint tenancy allocates survivorship rights to multiple property co-owners. When a co-owner dies, and a death certificate is issued, their share is inherited by the surviving joint owners.
Community Property with the Right of Survivorship
Only married couples can co-own property under the community property structure in California. Spouses can only pass on their stake in the property to each other in their estate plans.
These are some of the valid proofs of real estate property ownership. If you’d like to explore trust deed investing in California, contact the team at Fidelity Mortgage Lenders today. We’ll provide guidance and expertise to help you select viable real estate projects.