The Honest Broker: Different ways to own property: Deed designations
BY DIANE LOTT
One of the main considerations about purchasing a property is how does the new owner want the deed to be written as to its disposition of ownership interest. That interest can be inherited or can be measured by the lifetime of an individual. The attorney creating the deed, will need to know how you would like to own the property and your long term intentions for who/how you would like for it be owned after your ownership ends. The following are the most common ways for designating ownership.
The most comprehensive is the “fee simple” estate in which there is absolute and complete ownership. This has complete power to “use, to dispose of, and to allow the property to descend to heirs. It is the highest type of property interest recognized by law.
In life estates, the owner has considerably fewer rights whereby they own the property for only the period of the lifetime of an individual (either the owner or other designated person). During the lifetime that an owner enjoys a life estate, he/she must maintain the property, pay taxes and insurance, and keep current any mortgage or lien to preserve the property. When the life estate ends, the property reverts (returns) to the original grantor or goes to a third party.
There are several ways to co-own property.
TENANCY IN COMMON
A tenancy in common is the most frequently used form of co-ownership, except for husband-and-wife ownership. Any number of people may own property together and may hold different percentages of ownership in the entire property. This common interest may be transferred or inherited, in which case the heir becomes a tenant in common wit the others and that interest will descend to any of their subsequent heirs at the time of death. All named parties must agree to sell the property and divide it upon original percentages to the remaining heirs.
A major difference between a joint tenancy and a tenancy in common that joint tenancy is distinguished by the right of survivorship. Right of survivorship means that when one co-owner dies, his or her share goes to the surviving co-owner and not to the deceased person’s heirs. Joint tenants have an undivided interest in the property. Today, this can not be created unless specific wording in the deed provides for
Survivorship. The deed must include wording similar to, “as joint tenants with the right of survivorship and not as tenants in common.”
TENANCY BY THE ENTIRETIES
This is basically a joint tenancy between husband and wife; “married to each other at time of initiation of ownership”. This estate has its origin in the common-law attitude that a husband and wife are one ownership entity. When one spouse dies, that individual’s ownership interest automatically transfers to the surviving spouse. Neither party can “will” any portion of his or her interest. However, it can be divided by annulment or divorce. In the event of death, the survivor emerges as the sole owner of the property.
Stay well and stay healthy!
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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