TN 4 (07-13)

PS 01820.036 North Carolina

A. PS 13-086 Validity of Transfer of Interest in Real Property via Unregistered Quitclaim Deed for Determining Resources of Supplemental Security Income Applicant – North Carolina

DATE: June 6, 2013

1. SYLLABUS

This opinion examines whether an SSI applicant validly transferred her interest in real property via an unregistered quitclaim deed and whether the transfer had any effect on the applicant’s SSI eligibility. The SSI applicant transferred her interest in a North Carolina real property via quitclaim deed, which was not signed by the grantee or registered with the Register of Deeds. In North Carolina an unregistered deed is valid between the parties to the deed, and the grantee is not required to sign the quitclaim deed because by accepting an executed quitclaim deed, he becomes bound by the deed. Therefore, the SSI applicant validly transferred her interest in real property to the grantee, and there was no effect on her SSI eligibility because the valid transfer occurred more than 36 months before she applied for SSI.

2. OPINION

QUESTION

You asked whether a quitclaim deed, signed by a Supplemental Security Income (SSI) applicant as grantor, but not signed by the grantee or registered with the Register of Deeds, validly transferred the SSI applicant’s interest in real property to the grantee. You also asked about the effective date of any valid transfer and the effect of such a transfer on Applicant’s SSI eligibility.

OPINION

The SSI applicant validly transferred her interest in real property via the quitclaim deed in this case. The transfer was effective July 22, 2009, the date the deed was signed and notarized, and the transfer has no effect on the applicant’s SSI eligibility.

BACKGROUND

Based on the information provided, we understand the facts to be as follows: In May 2002, Edna (Applicant) and Richard (Grantee) acquired a fee simple interest in a parcel of real property located in North Carolina as joint tenants with right of survivorship. The May 2002 deed for the property was registered in the Cherokee County, North Carolina, Register of Deeds in June 2002. Applicant reported and county appraisal records indicate the property is presently valued at $30,250.

In April 2013, Applicant applied for SSI and the agency denied her application initially due to excess resources. Upon filing for reconsideration, Applicant provided a copy of a quitclaim deed, dated July 22, 2009, in which she, as Grantor, quitclaimed “all right, title and interest” she had in the North Carolina property to Grantee. The quitclaim deed recites that the transfer was “in consideration of None and other good and valuable consideration to Grantor paid.” Applicant’s signature is notarized and witnessed by two individuals—Grantee and his adult daughter. The quitclaim deed includes the typed word “seal” at the end of Applicant’s signature line. The quitclaim deed states that both Applicant and Grantee were residents of North Carolina when Applicant executed the quitclaim deed. The copy of the quitclaim deed does not indicate registration in the Cherokee County Register of Deeds. Applicant confirmed in a letter that the quitclaim deed has not been registered.

DISCUSSION

SSI is a general public assistance program for aged, blind, or disabled individuals who meet certain income and resource restrictions and other eligibility requirements. See Social Security Act (Act) §§ 1602, 1611(a); 20 C.F.R. §§ 416.110, 416.202 (2013). All subsequent references to the Code of Federal Regulations are to the 2013 edition unless otherwise noted. “Resources” include cash or other liquid assets or any real or personal property that an individual owns and could convert to cash to be used for his or her support and maintenance. See Act § 1613; 20 C.F.R. § 416.1201(a). The Act and regulations establish the dollar amount that an individual’s nonexcluded resources cannot exceed. See Act § 1611(a)(1)(B); 20 C.F.R. § 416.1205(a).

An individual’s eligibility for SSI may depend or be conditioned on the disposal, at fair market value, of resources that exceed the resource limitations, and the failure to dispose of property in an appropriate manner may render the individual ineligible for SSI. See Act § 1613(b)(1); 20 C.F.R. § 416.1240. An individual who gives away or sells a nonexcluded resource for less than fair market value on or after the “look-back date” may be ineligible for SSI for a prescribed period not to exceed thirty-six months. See Act § 1613(c)(1)(A)(i); 20 C.F.R. § 416.1246; Program Operations Manual System (POMS) SI 01150.001(A), (C)(3); POMS SI 01150.110(A), (D). The “look-back date” for initial claims is thirty-six months before the date the individual applies for SSI. See Act § 1613(c)(1)(A)(ii)(I); POMS SI 01150.001(D)(1); POMS SI 01150.110(C)(1). The agency evaluates transfers of resources to determine their validity and effect. POMS SI 01150.001. A valid transfer requires a legally binding agreement and results in the transferor no longer owning the property. See POMS SI 01150.001(B)(1). Giving away property may constitute a valid transfer. See POMS SI 01150.001(B)(3).

The quitclaim deed indicates Applicant and Grantee both reside in North Carolina; moreover, the property is located in North Carolina. Therefore, we turn to North Carolina law to determine if the unregistered quitclaim deed represents a valid transfer of Applicant’s interest in the property to Grantee. In North Carolina, a conveyance of land must be a deed, which generally denotes an instrument in writing signed and delivered by the grantor. New Home Bldg. Supply Co. v. Nations, 131 S.E. 2d 425, 427 (N.C. 1963). Previously, the grantor was also required to affix a seal to the deed, but that requirement was eliminated by statute in 1999. See N.C. Gen. Stat. Ann. 39-6.5 (West 2013) (eliminating need for seal of signatory to effect valid conveyance of interest in real property). A quitclaim deed is an effective means of transferring real property and conveys a grantor’s rights, title, and interest in the property, whatever they may be. Hayes v. Ricard, 97 S.E. 2d 105, 108 (N.C. 1957); Beaufort County Lumber Co. v. Price, 56 S.E. 684, 685 (N.C. 1907). Some jurisdictions specify that deeds must be witnessed by one or more witnesses. 26A C.J.S. Deeds, § 66 (2013). We have not found any North Carolina statute or case that imposes a requirement that a deed be witnessed. By statute, grantee is not a competent witness to attest to the validity of a registered deed. See N.C. Gen. Stat. Ann. § 47-12.2 (West 2013). That statute provides: “The execution of an instrument may not be proved for registration by a subscribing witness who is the grantee or beneficiary therein, nor by proof of his signature as such subscribing witness.” Id. As the quitclaim deed at issue has not been registered, this statute does not apply.

An unregistered deed is valid between the parties to the deed. Stephenson v. Jones, 316 S.E. 2d 626, 632 (N.C. 1984); Hi-Fort, Inc. v. Burnette, 257 S.E. 2d 85, 88 (N.C. Ct. App. 1979). An unregistered deed, however, would not defeat a bona fide purchaser for value or a creditor, who may rely upon the public records to determine ownership. S~, 316 S.E.2d at 632. As the quitclaim deed in this case is a written document, signed by Applicant and delivered to Grantee, it is a valid conveyance of Applicant's interest in the property to Grantee. Furthermore, Grantee was not required to sign the quitclaim deed in his capacity as grantee because, by accepting the duly executed quitclaim deed, he became bound by the deed. See Vettori v. Fay, 137 S.E. 2d 810, 811 (N. C. 1964).

Thus, the quitclaim deed was a valid transfer of Applicant's interest in the property. Applicant retained no interest in the property that she could sell or convert to cash for food or shelter. See Act § 1613; 20 C.F.R. § 416.1201(a); POMS SI 01150.001(B)(1).

The effective date of the transfer of the property is July 22, 2009, the date Applicant executed the quitclaim deed. Although the information provided indicates Applicant received less than fair market value for transferring her interest in the property, the transfer would not affect her eligibility for SSI because the transfer occurred more than thirty-six months before she applied for SSI in April 2013. See Act § 1613(c)(1)(A)(i), (c)(1)(A)(ii)(I); POMS SI 01150.001(A), (C)(3), (D)(1); POMS SI 01150.110(A), (C)(1), (D).

CONCLUSION

The quitclaim deed in this case constituted a valid transfer of real property, even though unregistered. While Applicant transferred her interest in the North Carolina property for less than fair market value, as the transfer occurred more than thirty-six months before she applied for SSI, it does not affect her eligibility.

Mary Ann Sloan
Regional Chief Counsel
By:_____________

Megan E. Gideon
Assistant Regional Counsel


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1601820036
PS 01820.036 - North Carolina - 07/11/2013
Batch run: 07/11/2013
Rev:07/11/2013