The Most Common Ways to Hold Title
One of the most important aspects of the entire escrow procedure is how a buyer
takes title. That not only determines how the buyer will be insured; it has significant
legal and tax consequences as well. It can even create some unanticipated
complications in the future, when the buyer decides later as an owner to transfer
the title to someone else. So much depends upon the precise way title is held, in fact, that a
buyer should not rely on advise from a Real Estate Agent, Escrow Officer or friend but
should consult an attorney or a tax consultant about his or her particular circumstances.
Tenancy in Common
When two or more persons buy property together, whether their shares are equal or
unequal, they are said to hold the property as tenants in common. Tenancy in common is so
standard as a form of ownership for unrelated buyers that it is generally presumed to be
equal unless they are listed otherwise on the deed, and each of the tenants has equal
rights of possession. Each co-tenant owns an undivided interest, but unlike in a joint
tenancy, these interests need not be equal and may arise from different conveyances and
at different times. There is no right of survivorship as in a joint tenancy, so if one of the
tenants in common should happen to die, his or her interest would not revert automatically
to the remaining tenants. Consequently,each tenant in common should note in a will the
person or persons to whom the share will pass. Unrelated property buyers usually buy as
tenants in common rather than as joint tenants because they want their property to go th
their heirs and not the surviving joint tenants. Each individual co-tenant can sell or
mortgage an interest in the land but acts only for his or her own share and cannot bind
anyone else's interest.
Joint Tenancy
The main distinguishing characteristic of joint tenancy is the right of survivorship. If one of
the joint tenants dies, his or her interest passes automatically to the surviving party or
parties instead of being tied up in lengthy probate proceedings. When two or more people
own a property as joint tenants, they own an undivided equal interest in the property and
have the same rights to the use of the entire property, that is, neither co-tenant can
distinguish which portion of the land he or she owns. Once a joint tenancy has been
properly created, all joint tenants must join in any document effecting title to the subject
property. Any documents conveying title to property held in joint tenancy which is not joined
by all joint tenants is questionable and cannot be insured.
Community Property
Holding title to property as community property is a type of ownership available to married
couples only. At present, eight states are considered community property states: Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. These states
regard any property purchased during a marriage as community property. Husband and
wife have an equal right to possess the property during their marriage, and in some states,
upon the death of either spouse, the survivor automatically receives half of the community
property and the other half passes to the lawful heirs. Neither holder of community property
may sell his or her share without notifying the other. If either one dies and leaves no will, the
surviving holder may acquire the property, but unlike in joint tenancy,either holder may will
his or her half to others.
Title in Partnership
An association of two or more persons who as co-owners carry on a business for profit is
called a partnership. It is created by an agreement between two or more persons to take
care of business jointly and share the profits. It may be a general partnership where each
partner is liable for the debts of the limited partnership, or a limited partnership, where each
limited partner's liability is limited to the amount of his or her investment and he or she is not
otherwise liable for the debts of the partnership. Tenancy in partnership allows any number
of partners to have equal or unequal interest in the property in relation to their interest in
the partnership. Each partner has equal rights of possession, but only according to the
partnership agreement.
Thank you Southland Title Corp. 7530 Glenoaks Blvd. Burbank CA 91504
One of the most important aspects of the entire escrow procedure is how a buyer
takes title. That not only determines how the buyer will be insured; it has significant
legal and tax consequences as well. It can even create some unanticipated
complications in the future, when the buyer decides later as an owner to transfer
the title to someone else. So much depends upon the precise way title is held, in fact, that a
buyer should not rely on advise from a Real Estate Agent, Escrow Officer or friend but
should consult an attorney or a tax consultant about his or her particular circumstances.
Tenancy in Common
When two or more persons buy property together, whether their shares are equal or
unequal, they are said to hold the property as tenants in common. Tenancy in common is so
standard as a form of ownership for unrelated buyers that it is generally presumed to be
equal unless they are listed otherwise on the deed, and each of the tenants has equal
rights of possession. Each co-tenant owns an undivided interest, but unlike in a joint
tenancy, these interests need not be equal and may arise from different conveyances and
at different times. There is no right of survivorship as in a joint tenancy, so if one of the
tenants in common should happen to die, his or her interest would not revert automatically
to the remaining tenants. Consequently,each tenant in common should note in a will the
person or persons to whom the share will pass. Unrelated property buyers usually buy as
tenants in common rather than as joint tenants because they want their property to go th
their heirs and not the surviving joint tenants. Each individual co-tenant can sell or
mortgage an interest in the land but acts only for his or her own share and cannot bind
anyone else's interest.
Joint Tenancy
The main distinguishing characteristic of joint tenancy is the right of survivorship. If one of
the joint tenants dies, his or her interest passes automatically to the surviving party or
parties instead of being tied up in lengthy probate proceedings. When two or more people
own a property as joint tenants, they own an undivided equal interest in the property and
have the same rights to the use of the entire property, that is, neither co-tenant can
distinguish which portion of the land he or she owns. Once a joint tenancy has been
properly created, all joint tenants must join in any document effecting title to the subject
property. Any documents conveying title to property held in joint tenancy which is not joined
by all joint tenants is questionable and cannot be insured.
Community Property
Holding title to property as community property is a type of ownership available to married
couples only. At present, eight states are considered community property states: Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. These states
regard any property purchased during a marriage as community property. Husband and
wife have an equal right to possess the property during their marriage, and in some states,
upon the death of either spouse, the survivor automatically receives half of the community
property and the other half passes to the lawful heirs. Neither holder of community property
may sell his or her share without notifying the other. If either one dies and leaves no will, the
surviving holder may acquire the property, but unlike in joint tenancy,either holder may will
his or her half to others.
Title in Partnership
An association of two or more persons who as co-owners carry on a business for profit is
called a partnership. It is created by an agreement between two or more persons to take
care of business jointly and share the profits. It may be a general partnership where each
partner is liable for the debts of the limited partnership, or a limited partnership, where each
limited partner's liability is limited to the amount of his or her investment and he or she is not
otherwise liable for the debts of the partnership. Tenancy in partnership allows any number
of partners to have equal or unequal interest in the property in relation to their interest in
the partnership. Each partner has equal rights of possession, but only according to the
partnership agreement.
Thank you Southland Title Corp. 7530 Glenoaks Blvd. Burbank CA 91504
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