OPTIONS FOR TAKING TITLE

Posted by Lise | Filed under: Buyers

Ownership interest simply refers to the rights of an owner. The ownership interest in real estate is similar to that in other types of property. Owners have the right to determine the use of the property, the right to receive the benefit or service of the property and, in most cases, the right to delegate or sell any of their ownership rights. Because real estate property changes hands many times over many generations, the ownership interest is often divided among several parties or severed into different rights of use.  The way you take title can have long term consequences to your ownership and ability to sell or devise the property in the future.  This is a very important conversation to have in advance with your title attorney.  Please do not leave this to the last minute!

In Maryland and the District of Columbia there are four basic ways to hold title to a property. This may also be referred to as ways to hold tenancy.

First of all, there is “fee simple”. This can be thought of the most basic and strong way to hold property. An example of fee simple is when you buy a home by yourself. You take the title in “fee simple” and have rights to use this property as you see fit (subject to county, state, or federal regulation) and the right to convey this property. This is the most straightforward and strongest form of tenancy.

Secondly there is “tenants in common”. This is when you own a portion of a property. An example of this is when you purchase a property with a friend. Here you could both take title of the property and share the property. The interesting point of this tenancy is that you can spell out the percentage ownership. So you might own 70% and your friend might own 30%, or you might own 50% and your friend might own the other 50%. This is often used in partnership-like situations.

Thirdly there is “joint tenants with right of survivorship” (JTROS). Many people take title in this form without realizing that it is quite different from “tenants in common” (TIN). In fact, they are very different. A common example of this is when you take title with a sibling. Here you will both actually half of the property but if one of you passes away then the surviving person has all of the property. This passage upon death is the “right of survivorship”. This is sometimes used in estate planning to avoid estate issues. But remember that if you have children and own land with your sibling in JTROS, for example, upon death your half will pass to your sibling and not to your children. So it is very important that you hold title in “tenants in common” if you have children and would like your interest in property pass down rather than to your joint owner.

The final form of title is “tenancy by the entireties” “T/E”. This is much like JTROS above except that it is between a married couple. This tenancy has all the aspects of JTROS plus it has the extra benefit of protection from individual creditors. So, if a husband and wife purchase a home together, and the husband owes huge credit card debt, the credit card companies cannot come after the home because it is held as “tenancy by the entireties”. This is a vital protection in states where T/E is available. It is very important that the deed is written specifically to dictate T/E ownership. Absent specific language there may be objections raised by creditors.

Remember that the way in which title is held is very important.  Always think about what you are trying to accomplish with your purchase, and have a competent real estate lawyer verify that your deeds are written correctly.

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24 Responses

  1. Alexander says:

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    ñïàñèáî çà èíôó!…

  2. Jay says:

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    спс!!…

  3. virgil says:

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    good info….

  4. jon says:

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  5. Pedro says:

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    thank you!!…

  6. dennis says:

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  7. angel says:

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  9. Gabriel says:

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  10. stephen says:

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  11. alan says:

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  12. Eugene says:

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  13. bradley says:

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  14. Orlando says:

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  15. Curtis says:

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  16. manuel says:

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  17. Manuel says:

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  18. Ernesto says:

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  19. jon says:

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