MSI Blog | Five Common Ways to Own Your Property

June 9, 2011 by Ann McLaurin

Title to real estate in the US is the method in which ownership is conveyed and transferred during real estate purchases and sales. There are five ways that title can be held when two or more people purchase property together. Which one is best for your situation? Knowing the implications of each form of ownership will help you decide how your deed should be written.

1. Tenancy by the entireties. This form of ownership is reserved exclusively for married people. Both a husband and wife own an undivided interest in the property. On the death of one party, the surviving spouse owns the entire property and no probate will be necessary.
2. Tenants in common. As tenants in common, each party owns a percentage interest in the property. On the death of one party, his or her interest does not go to the surviving owner, but is distributed in accordance with the will of the deceased, whose estate must be probated.
3. Joint Tenants. As joint tenants, each party owns an undivided, equal interest that passes automatically to the surviving joint tenant. Probate is not necessary if the deed reads "joint tenants with rights of survivorship".
4. Sole Ownership. Sole ownership can be characterized as ownership by an individual (or entity legally capable of holding title). The most common sole ownerships are held by single men and women, married men or women who hold property apart from their spouse, and businesses with corporate structure allowing it to invest in or hold interest in real estate. In the situation of married persons wishing to own real estate apart from their spouse, companies will typically require the spouse to specifically disclaim or relinquish their right to ownership in the property.
5. Community Property. Community property is a form of ownership by husband and wife during their marriage that they intend to own together. Under community property, either spouse has the right to dispose of one half of the property or will it to another party. Outside of real estate, property acquired during one's marriage is usually deemed community property.

   Real estate that is acquired during a common-law marriage will also be considered to be held as community property. Anyone who has lived with another person as a common-law spouse and doesn't specifically change title to the property as sole ownership (which is legally transacted with approval by the significant other) takes the risk of having to share ownership of the property in the absence of having a legal marriage.

The methods of owning real estate are determined by state law, so individuals trying to determine the best method to acquire and hold real-property titles should conduct local research to determine the unique differences for each method as set out by the state.?

For those considering owning real estate through a business entity, such as corporation, trust or partnership, it is advisable to consult real estate, legal and tax professionals to determine which ownership structure is the most beneficial for their particular situation. In the event of sole and joint ownership by individuals, prospective owners should consider how their titles should or could be transferred, either by sale, a future relocation or in the event of death, before one method is chosen over another. It is important to know that in most courts, if a deed is written without specification of how title is held, the property is titled as "tenants in common."

Source: http://www.msimobility.com/blog/post/2011/06/09/Five-Common-Ways-to-Own-Your-Property.aspx

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