Domestic Partners Have Community Property in Washington

By
Title Insurance

In May, 2009, Washington Governor Gregoire signed a new Washington Bill that would further expand the rights of registered domestic partners.  On August 31st, Referendum 71 was certified, that blocked the July 26th effective date and required the public to ratify the 2009 laws.

You and your customers may be wondering how the Referendum and the future vote affect real property transactions.   This is an opportunity to discuss how people can hold title to real property, and explore some of the differences between the commonly used estates: community property, tenancy in common and joint tenancy.

The Washington Legislature created registered domestic partners beginning July of 2007.  For convenience, I say "domestic partners" but it is important to understand that only a registration with the Washington Secretary of State creates a legally-recognized domestic partnership.  See Chapter 26.60 RCW and the web site at the Secretary of State to find the requirements, the procedures and the forms for registration with the state.   Washington also recognizes similar registration laws of other states, but does not recognize a same sex marriage even if that is legal in the state of that marriage.

Domestic partnerships don't have to wait for the vote to ratify this year's law before they may receive the benefits of community property!  Referendum 71 only affects the expansion of the domestic partnership laws that were enacted in 2009, and has no effect on prior laws. Last year, effective since June 12, 2008, domestic partners were given all the rights and benefits of community property.  RCW 26.16.030 provides:

"Property not acquired or owned, as prescribed in RCW 26.16.010 [separate property of a spouse] and 26.16.020 [separate property of a domestic partner], acquired after marriage or after registration of a state registered domestic partnership by either domestic partner or either husband or wife or both, is community property."

Equally important, the prior law also gave domestic partners homestead rights in the separate property of the other domestic partner.  See 6.13.020 and 6.13.060.  So, if a domestic partner or spouse is occupying the property, they must join in a mortgage or conveyance even though the title to the property may be held as the separate property of the other domestic partner or spouse.

There are many domestic partnerships where title is held by only one person, acquired before these laws provided community property rights.  If you have a customer in that situation, please recommend for them to record a deed from the one owner to the two domestic partners in order to create community property.  These deeds are free of any excise [conveyance] tax as a result of the domestic partnership laws passed last year.   You may contact any Limited Practice Officer at an escrow company or title company for assistance preparing that deed, excise affidavit and having it properly recorded.

RCW 26.16.100 also provides that a domestic partner who is not on the title may record a claim of right to the real property.  It is important to put those rights of record, because that statute also provides that if the claim is not filed, a purchaser may receive title free of the claim of that domestic partner.  

"And if either spouse or either domestic partner fails to cause such an instrument to be filed in the auditor's office in the county in which real estate is situated, the legal title to which is held by the other, within a period of ninety days from the date when such legal title has been made a matter of record, any actual bona fide purchaser of such real estate from the person in whose name the legal title stands of record, receiving a deed of such real estate from the person thus holding the legal title, shall be deemed and held to have received the full legal and equitable title to such real estate free and clear of all claim of the other spouse or other domestic partner."

The table below includes community property and the other typical ways that individuals hold title together.  There are significant differences between these estates.  The table clearly shows the benefits of community property for spouses and domestic partners.  

Characteristics of the Estate:

Community Property

Tenancy in Common

Joint Tenancy

with Right of Survivorship

Parties

Married persons

or Registered Domestic Partners.

Any number of persons.

(Married persons or registered domestic partners may also.)

Any number of persons.

(Married persons or registered domestic partners may also.)

Division

Ownership interests are equal.

Ownership can be divided into any number of different percentages.

All owners must have equal interests and equal rights of possession.

Creation

Community property is presumed by any deed to married person or to registered domestic partners.  The grantee language should include "married persons," "husband and wife" or "registered domestic partners."

The deed should state "as tenants in common.  Each person's interest is presumed to be equal if not stated.

All owners must acquire in one deed stating "as joint tenants."

The grantees should also sign to confirm their intention to hold title with survivorship rights.

Title

Title is in the "community." There is one estate, not two half interests.

Each co-owner has a separate legal title to their undivided interest.

Each co-owner has a separate legal title to their undivided interest.

Conveyance by

One Owner

Both co-owners must convey real property jointly.  One co-owner cannot convey a deed or mortgage separately.

Each co-owner's interest may be conveyed separately.

A conveyance by one co-owner without the others breaks the joint tenancy.

The Grantee becomes a tenant in common with the other owners and the interest does not pass to survivors.

Death

The decedent's half may be given by Will, or it passes to descendants by laws of succession.  The spouse or registered domestic partner is the primary heir.

The decedent's interest may be given by Will, or it passes to descendants by laws of succession.  No right of survivorship to other Co-Owners.

The decedent's interest terminates.  All survivors own equal shares of the decedent's interest by right of survivorship.

Creditors' Rights

Co-owner's interest cannot be seized and sold separately for most separate debts.

Co-owner's interest may be sold on execution sale to satisfy creditors.

Co-owner's interest may be sold on execution sale to satisfy creditors.  The joint tenancy is then broken.

If you or your customers have questions about the characteristics of these estates, or about the effect of the domestic partnership laws on transfers of real property, please write to me at DwightB@RainierTitle.com so I can post a blog answer for the benefit of everyone.

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Rainer
125,115
Sandra White
John L Scott Real Estate - Port Townsend, WA
Experienced Residential Resale Broker

Very interesting.  I had no idea of the domestic  partnership registration.  Thank you for all that information.

Jun 09, 2009 06:02 AM #1
Anonymous
jaydee

I recently read a story online: http://www.bankapedia.com/mortgage-encyclopedia/residential-mortgage-terms/309-quitclaim-deed - in which a women was basically tricked into signing a quitclaim deed during a refinance. She apparently didnt have the best credit, so I guess they got a better rate with her off the loan. In any case, as soon as their loan closed, he dumped her, kicked her out of the house and moved in with his girlfriend. She was left to rent an apartment and had no claim to the house. 

Does she have any recourse- this was in NV a community property state by the way.

 

 

Jun 21, 2009 11:21 AM #2
Rainer
9,246
Dwight Bickel
Seattle, WA

Your question is not related to the domestic partnership or the types of estates to hold property.  Any person seeking a remedy to rescind or cancel a deed would need an attorney qualified in real property law. 

Generally speaking, and not providing legal advice for Nevada, I can only say that a person does have recourse against the other party directly, but will not be able to rescind or disavow a deed voluntarily given to the extent a third party has relied upon it without knowledge of a fraud.  The lender in that example will be entitled to enforce the deed such that the grantor cannot set aside the lien.  However, based on proof of fraud in the inducement, a grantor could seek a Court order restoring the interest in the land as against the fraudulent grantee.  That would be a diificult burden of proof.

In Washington, even after a spouse has quitclaimed the property to the other spouse to establish separate property, in a Dissolution of Marriage, the separate property of the spouses is within the property to be divided equitably.  A deed simply to qualify for better credit would be a good example where the divorce court would likely require division of the separate property.

Jun 22, 2009 06:54 AM #3
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Rainer
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Dwight Bickel

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