At Katzner Law Group, clients often approach us with concerns about property ownership, especially in situations where their name is on the deed but not on the mortgage. This legal distinction can feel confusing and carries important implications for ownership rights, financial liability, and estate planning. Whether you’re in this position due to family arrangements, relationship dynamics, or financial strategy, it’s crucial to understand what this means for you under New York law.
Deed vs. Mortgage: What’s the Difference?
A common point of confusion is the difference between a deed and a mortgage, both of which serve very different legal functions:
- A deed is a legal document that grants you ownership of a property. If your name is on the deed, you are considered a legal titleholder.
- A mortgage, by contrast, is a contract between a borrower and a lender. It creates a lien on the property and gives the lender the right to foreclose if the borrower fails to make payments.
It’s entirely legal to own real estate, be listed on the deed, without being a party to the mortgage loan. This arrangement often arises when one party does not qualify for financing but still contributes to the property. According to New York State’s Division of Consumer Protection, such arrangements can have long-term implications, especially if not clearly defined.
Can You Own Property Without Being on the Mortgage?
Yes, if your name appears on the deed, you legally own the property, regardless of whether you’re named on the mortgage. Ownership grants you several legal rights, including:
- The right to occupy and use the home
- The right to transfer your share through sale or inheritance
- The right to share in any appreciation or equity
However, not being on the mortgage means you are not financially liable for the debt associated with the property. You won’t receive default notices, and your credit won’t be affected if the mortgage holder falls behind. But there’s a catch—if the mortgage isn’t paid, you could still lose the property to foreclosure, despite having ownership.
The New York Courts provide a clear explanation of how foreclosure works and how it affects all property owners—even those not on the mortgage.
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Legal Rights of a Person Named on the Deed Only
Building on the above, being on the deed gives you significant legal rights over the property. These include:
- Right of possession – You can reside in or rent out the property.
- Right of control – You have a say in how the property is used.
- Right of exclusion – You may prevent others from entering the property.
- Right of disposition – You can sell, gift, or will your ownership share.
Your specific rights may also depend on how the deed is titled. For example:
- Joint tenancy means each owner has equal rights and includes rights of survivorship.
- Tenancy in common allows for unequal ownership and no survivorship.
- Tenancy by the entirety is limited to married couples and offers creditor protections.
Even if you’re not on the mortgage, these deed arrangements define your legal ability to sell your share, prevent others from selling theirs without your consent, and determine what happens upon your co-owner’s death.
Financial Risks When Not Listed on the Mortgage
Although you are not obligated to make mortgage payments if you’re not listed on the loan, that doesn’t mean you’re insulated from financial risk. You may still face:
- Foreclosure exposure – If the mortgage isn’t paid, the lender can foreclose and sell the property, potentially wiping out your ownership rights.
- No legal access to loan info – Since you’re not a borrower, lenders aren’t required to notify you about delinquencies or changes to the loan.
- No ability to negotiate – You can’t refinance or modify the loan, even if you’re paying part of it.
- Lien vulnerability – Creditors or contractors may place a lien against the property, impacting your ownership share.
For instance, as Proplogix explains in their guide, even co-owners not involved in a transaction can be affected by surprise liens if a fellow owner fails to pay.
Real-World Example: Title but No Mortgage Obligation
Imagine you and a sibling buy a home together. Your sibling qualifies for a mortgage and signs the loan, but both of you are listed on the deed. You each invest in the down payment and share expenses.
Legally, you both own the property. But if your sibling stops paying the mortgage, the bank could initiate foreclosure proceedings, putting your share of the property in jeopardy, even though you’re not financially responsible for the mortgage debt.
That’s why many estate and real estate attorneys recommend drawing up co-ownership agreements in these cases to establish clear expectations.
What Happens During a Sale or Refinance?
If you’re on the deed, your signature is required to sell the property, even if you’re not on the mortgage. The same is true in most cases if the mortgage holder wants to refinance. Your consent is usually needed unless the ownership structure or title allows otherwise.
Without an agreement in place, conflicts can arise about:
- How sale proceeds are split
- Whether one party can force a sale
- How equity is calculated and divided
These legal and financial decisions can become contentious, making it critical to have written, enforceable agreements between co-owners.
Protecting Yourself: Key Steps to Consider
If you are in this situation or considering it, take steps to protect your legal and financial interests:
- Sign a co-ownership agreement that defines roles, responsibilities, and exit plans.
- Stay informed about the mortgage’s status by maintaining open communication with the borrower.
- Request legal safeguards, like being notified of any foreclosure actions or being added to insurance and tax records.
- Review your estate plan to ensure your ownership interest is preserved or transferred according to your wishes.
You can also explore additional protections under New York real property laws found in the New York State Senate’s Real Property Law archive.
How Katzner Law Group Can Help
If your name is on the deed but not on the mortgage, your ownership may be at risk without proper legal protections in place. At Katzner Law Group, our experienced estate attorney can help you:
- Clarify your rights as a titleholder.
- Create a legal agreement with co-owners.
- Review the deed and mortgage documents.
- Ensure your interest is protected in estate planning.
Whether you’re dealing with a shared home, inherited property, or joint ownership with a partner, you deserve clarity and security.
Call us at 855-528-9637 or reach out through our contact page to schedule a personalized consultation today.