Malcolm Rivera
Real property in New York can be transferred in several ways, both during one's lifetime and after death. During one's lifetime, real property can be transferred voluntarily, such as through a sale, gift, or dedication, or involuntarily, through adverse possession, foreclosure, condemnation or eminent domain, or partition. After one's death, real property can be transferred by will, by descent (without a will), or by escheat (without a will or heirs). In New York, a deed is used to transfer real property, and there are several types of deeds that offer varying levels of protection for the grantee. Additionally, New York imposes a real estate transfer tax on conveyances of real property when the consideration exceeds $500, with an additional mansion tax for residences where the consideration is $1 million or more.
| Characteristics | Values |
|---|---|
| Voluntarily | Sale, gift or dedication |
| Involuntarily | Adverse possession, condemnation or eminent domain, foreclosure, partition |
| After death | By will, by descent (without a will) or by escheat (without a will or heirs) |
| Deed | A document used by the owner of real property to transfer or convey the right, title, and interest to the property |
| Grantor | The person transferring the property |
| Grantee | The person receiving the property |
| Consideration | The amount of money given in exchange for the property |
| Transfer report form | Required for recording or accepting conveyance of real property |
| Real estate transfer tax | Applies to conveyances of real property or interests therein when the consideration exceeds $500 |
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What You'll Learn
Adverse possession
It is more difficult to establish adverse possession in New York than in other jurisdictions. The legislature requires trespassers to have a reasonable belief that they have legal title to the disputed property. This "claim of right" means that a trespasser cannot intentionally occupy someone's land with the specific goal of gaining title after a decade.
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Involuntary transfer
One form of involuntary transfer is condemnation or eminent domain, where federal, state, or local governments have the power to take property for public use, providing just compensation to the owner. This process is typically initiated through a lawsuit and requires proper notice to the owner, who has the right to challenge both the taking and the amount of compensation offered.
Foreclosure is another involuntary transfer process used to satisfy debts. In this case, the real property is sold to pay off various types of liens, including mortgage, judgment, mechanics, and tax liens. The property must be subject to a mortgage or lien for foreclosure to occur.
Adverse possession is a unique legal concept that allows a trespasser, whether a stranger or a neighbour, to gain legal title to land. In New York, adverse possession requires the trespasser to prove several factors, including the nature of their possession and the length of time they possess the land. Specifically, the trespasser must occupy the land exclusively and openly for a statutory period of ten years, after which they can bring a "quiet title" action to gain title. Adverse possession applies to various types of property, from rural farmland to commercial real estate, and can alter the chain of land ownership.
Lastly, partition involves the involuntary transfer of real property when multiple owners cannot agree on its use. In this case, one or more of the owners can file a partition action, requesting the court to divide the property physically or forcibly sell it and divide the proceeds.
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Transfer after death
Transfer on Death (TOD) deeds have become a popular way to transfer property in New York after death without the need for probate. The New York Real Property Transfer on Death Act, which came into effect on July 19, 2024, allows property owners to transfer real estate to their chosen beneficiaries upon their death. This law provides a streamlined and flexible solution for transferring property, saving the estate time and money.
A TOD deed allows a property owner to designate one or more beneficiaries to automatically receive the real estate upon the owner's death. The owner retains full control during their lifetime and can sell, mortgage, or revoke the TOD deed at any time. The deed must meet specific requirements to be effective and legally binding. One of the key benefits of a TOD deed is that it avoids probate, a court-supervised process of administering a deceased person's estate, which can be lengthy and costly.
However, there are certain limitations to consider. TOD deeds cannot be used to transfer property to minors, as they cannot own real property. Additionally, if there are multiple owners or beneficiaries, it can create confusion. It may not be suitable in situations where the transferor wishes to plan for contingency options or distribute shares among various parties.
In the case of a transfer of property without a will in New York, the process involves initiating a 'verified petition and order' with the county registrar. The administrator conducts a final accounting, followed by court approval, and the estate is officially closed once all parties are content. The registrar then issues a new certificate of title, signifying the transfer of ownership rights, and the new owner must file Form RP-5217-PDF with the county clerk to complete the transfer.
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Real estate transfer tax
In the state of New York, real estate transfer tax is imposed on conveyances of real property or interests therein when the consideration exceeds $500. The tax is computed at a rate of $2 for each $500, or fractional part thereof, of consideration. An additional tax of 1% of the sale price (mansion tax) applies to residences where the consideration is $1 million or more.
The state of New York defines real property as:
> every estate or right, legal or equitable, present or future, vested or contingent, in lands, tenements or hereditaments, including buildings, structures and other improvements thereon, which are located in whole or in part within the state of New York. It does not include rights to sepulture. Residential Real Property - Any premises that is or may be used in whole or in part as a personal residence and shall include a one, two or three-family house, an individual condominium unit or a cooperative apartment unit.
There are several ways in which real property can be transferred in New York, both during one's lifetime and after death. During one's lifetime, property can be transferred voluntarily or involuntarily. Voluntary transfers can be made by sale, gift, or dedication. In a sale, the property is exchanged for something else of value, known as "consideration". When the owner transfers the property without receiving anything of value in return, it is considered a gift. When a portion or whole of the property is transferred to the government, it is called a dedication.
Involuntary transfers of property can occur in several ways, including condemnation or eminent domain, foreclosure, adverse possession, or partition. Eminent domain allows federal, state, and local governments to take property in exchange for just compensation, for the public benefit. Foreclosure occurs when property is taken involuntarily to pay off debts. Adverse possession occurs when the owner does not occupy or visit their land and has not clearly marked its boundaries. Another person or persons may claim ownership of the land and use it exclusively and openly for a period of ten years. After this time, the claimant can bring a "quiet title" action and gain title to the property. Partition occurs when property owners cannot agree on what to do with the property and one owner files a partition action to ask the court to either divide the property or sell it and divide the proceeds.
After one's death, property can be transferred in three ways: by will, by descent (without a will), or by escheat (when the property owner has no will or heirs).
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Deeds
A deed is a document used by the owner of real property to transfer or convey the right, title, and interest to the property. The person transferring the property is called the "grantor", and the person receiving it is called the "grantee". The grantor must be of sound mind and be over 18 years of age; otherwise, the court can later void the transaction or determine that it was invalid.
The deed must meet the following requirements:
- Recite the consideration (although the deed usually states only a nominal amount like $10.00, not the actual amount being given in exchange for the property)
- Include a granting clause that uses words showing the property is being transferred, such as “I hereby grant, covenant and demise”
- Identify the real property, usually by giving the legal description
- Include the addresses of both the grantor and the grantee
- Be delivered to the grantee and accepted by them
There are several types of deeds used in New York, including:
- Deed with Full Covenants, also called a General Warranty Deed, which provides the most protection for the grantee because the grantor is promising that they are the owner of the property
- Executor’s or Administrator’s Deed, used to transfer property in a deceased person’s estate to their heirs. The executor’s deed is used when the decedent died with a will, and the administrator’s deed is used when the decedent died without a will
- Quitclaim Deed, which provides the grantee with the least protection; it contains no promises or warranties, and only conveys whatever title and interest the grantor has. The grantor is basically saying that they might have an interest in the property and are transferring that interest. This type of deed is generally used between family members or in a divorce situation
- Life estate deed, which allows the beneficiary to have a vested future interest once the deed is signed and recorded. A life tenant cannot transfer complete ownership of the property unless the beneficiary joins in the transfer
- Survivorship deed, which places title in the names of at least two owners who share a right of survivorship, meaning a surviving owner automatically receives a deceased owner’s interest
In New York, a deed must be recorded in the appropriate county to formally transfer the property. Certain governmental organizations or entities are exempt from the payment of the real estate transfer tax, and certain types of conveyances are not subject to the tax.
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Frequently asked questions
Adverse possession is a way of gaining legal ownership of land in New York. Under adverse possession, people can gain title to land that previously belonged to another owner. This can apply to all different types of property, from rural farmland to commercial real estate. To establish a claim of adverse possession, a property owner must commence or defend litigation in New York's Supreme Court and establish all the elements.
A deed is a document used by the owner of real property to transfer or convey the right, title, and interest to the property. The person transferring the property is called the "grantor" and the person receiving it is called the "grantee." The deed must be in writing and include the legal description of the land being transferred. The grantor must be of sound mind and be over 18 years of age.
There are three ways to voluntarily transfer or grant an interest in real property while you are living: by sale, gift, or dedication. There are also involuntary methods of transferring your real property, such as adverse possession, condemnation or eminent domain, foreclosure, or partition.
There are three ways that real property can be transferred after someone's death: by will, by descent (an estate without a will), or by escheat (when the property owner has no will and no heirs). The Executor's Deed is used when the decedent died with a will, and the Administrator's Deed is used when the decedent died without a will.
Yes, New York State imposes a real estate transfer tax on conveyances of real property or interests therein when the consideration exceeds $500. The tax is computed at a rate of $2 for each $500 of consideration. An additional tax of 1% of the sale price (mansion tax) applies to residences where the consideration is $1 million or more. Certain governmental organizations or entities are exempt from the payment of the real estate transfer tax.
