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When a Homeowner Dies
When an owner of real estate dies, two questions arise:  
  • What happens to his ownership interest in the property, and
  • What happens to the mortgage.

What Happens To The Mortgage

The bank loan to purchase the house is secured by a mortgage lien on the real estate.  The borrower pledged the real estate as collateral for the loan to purchase the house.  The borrower’s promise to pay back the loan is called the promissory note.

All mortgage promissory notes include a “due-on-sale clause.”  This contract provision authorizes a lender (the bank), at its option, to call in the loan, i.e. declare immediately due and payable sums secured by the mortgage lien, if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender’s prior written consent. 

For example, if an owner of mortgaged property dies and his interest is transferred to his heir, the loan’s due-on-sale clause allows the bank to demand that the entire loan balance be immediately paid.  If it is not paid, then the borrower has breached the contract and the bank can foreclose.  However, the Garn – St. Germain Act created many exceptions to this general rule. 

The Garn St. Germain Act

The Garn – St. Germain Depository Institutions Act, a federal law passed in 1982, stops banks from foreclosing on residential real property, containing less than five dwelling units, because of a transfer:

  • By devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;

  • To a relative resulting from the death of a borrower;

  • Where the spouse or children of the borrower become an owner of the property;

  • Resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; or

  • Into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property.

The Garn-St. Germain Act prohibits the bank from foreclosing where the property owner dies and his interest in the home is transferred to a spouse, child or relative.  Similarly, if the owner that died was a joint tenant or a tenant by the entirety, the bank cannot foreclose just because the deceased owner’s interest is transferred to the other joint tenants or the other tenant by the entirety.

Simply put, the lender cannot foreclose just because a homeowner dies and his interest in the home is transferred to his heirs or a joint tenant.  Of course the bank can foreclose if the mortgage, taxes or insurance are not paid, the home is sold to a third party or there is any other breach of the mortgage agreement.

What Happens to the Deceased's Ownership Interest in the Property

What happens depends on what type of ownership the deceased held in the property.  There are degrees of home ownership, ranging from full ownership, to partial ownership to rental.  Full ownership of real estate is called fee simple title.  When a homeowner has fee simple title, he has the right to transfer full ownership to someone else, either during his lifetime or upon his death.

Ohio has two forms of real property ownership where two or more persons own the property:  Tenancy in Common and Survivorship Tenancy.  Each owner in a tenancy in common owns an undivided fractional share of the property.  The fractional shares may be equal or unequal.  Each individual owner can sell, use or transfer their share and upon their death pass their share to their heirs.

A survivorship tenancy is similar to a tenancy in common, except that tenants have the additional right of survivorship, meaning that when one tenant dies his share automatically passes to the surviving tenants.  Thus, the ownership interest cannot be passed by will.  Another type of ownership, tenancy by the entireties, was authorized by statute in Ohio between 1972 and 1984.  Tenancy by the entireties is essentially a suvivorship tenancy created by a husband and wife.  Though since 1984 tenancy by the entireties can no longer be created in Ohio, those tenancies created in the twelve years when Ohio allowed them are still valid.

If the ownership is in fee simple title or tenants in common, the owner determines what happens to the property after his death, whereas in a survivorship tenancy or tenancy by the entireties when one tenant dies his share automatically passes to the surviving tenants.

Survivorship Language

A property that has more than one owner may be a survivorship tenancy.  The language that creates the tenancy is in the deed that transferred the property to the current owners.  The owners will have the original deed, but there is also a public copy of it at the Office of the County Recorder in the county where the property is located.

For the deed to create a survivorship tenancy, it must contain the following language in the beginning of the deed as required by Ohio Revised Code § 5302.17:

grant(s), to [name of owner one] and [name of owner two], for their joint lives, remainder to the survivor of them,

If there is more than one owner of the property and the above survivorship language is not present in the deed, then the owners hold the property as tenants in common.

Recording the Survivorship Transfer

Though the deceased’s interest in survivorship property is automatically transferred to the survivors by operation of law upon the death of the survivorship tenant, this change in ownership must still be made a matter of public record by filing the appropriate paperwork in the Office of the County Recorder in the county where the property is located.

The surviving tenant(s) must file an affidavit accompanied by a certified copy of the death certificate.  The affidavit must recite the names of the other survivorship tenant(s), their address, the date of decedent’s death, and a description of the real property.  R.C. § 5302.17.

For what happens to non-survivorship property upon the death of an owner, see the Non-Survivorship Property page.


This website provides general legal information and not legal advice.  The law is complex and changes frequently. 
Before you apply any general legal information to a particular situation, consult an attorney. 
If you cannot afford an attorney call 1-866-Law-Ohio (1-866-529-6446) or visit OhioLegalHelp.org for your closest legal aid office.