National Directory of Real Estate Professionals
Five Methods of Holding Title:
- Tenancy in Common
- Sole Ownership
- Community Property
- Joint Tenancy
- Community Property with Right of Survivorship Tenancy in Common
The following are definitions of common vesting as an informational overview. Consumers
should not rely on these as legal definitions. The Association urges real property
purchasers to carefully consider their titling decision prior to closing, and to seek
counsel should they be unfamiliar with the most suitable ownership choice for their
particular situation.
Sole Ownership
Sole ownership may be described as ownership by an individual or other entity capable
of acquiring title. Examples of common vesting in cases of sole ownership are:
- A single man or woman
- An unmarried man or woman
- A married man or woman as his or her sole and separate property
The title company insuring title will require the spouse of a married man or woman
acquiring title to specifically disclaim or relinquish his or her right, title and
interest in the property.
Co-Ownership
Title to property owned by two or more persons may be vested as follows:
Community Property
A form of vesting title to property owned by husband and wife during their marriage which
they intend to own together. Community property is distinguished from separate property,
which is property acquired before marriage, by separate gift or bequest, after legal
separation, or which is agreed to be owned only by one spouse.
Joint Tenancy
Joint Tenancy is a form of vesting title to property owned by two or more persons, who may
or may not be married, in equal interest, subject to the right of survivorship in the
surviving joint tenant(s). Title must have been acquired at the same time, by the same
conveyance, and the document must expressly declare the intention to create joint tenancy
estate. When a joint tenant dies, title to the property is automatically conveyed by
operation of the law to the surviving joint tenant(s). Therefore, joint tenancy property
is not subject to disposition by will.
Tenancy in Common
A form of vesting title to property owned by any two individuals in undivided fractional
interests. These fractional interests may be unequal in quantity or duration and may arise
at different times. Each tenant in common owns a share of the property, is entitled to a
comparable portion of the income from the property and must bear equivalent share of
expenses. Each co-tenant may sell, lease or will his/her heir that share of the property
belonging to him/her.
Community Property with Right of Survivorship
A form of vesting title to property owned by husband and wife during their marriage which
they intend to own together. Right of Survivorship avoids probate. Mutual consent required
for transfer. Decendent's interest automatically passes to surviving spouse due to Right
of Survivorship. Surviving spouse may have tax advantage.
Other Ways of Vesting Title Include:
A Corporation
A corporation is a legal entity, created under state law, consisting of one or more
shareholders but regarded under law as having existence and personality separate from such
shareholders.
A Partnership
A partnership is an association of two or more persons who can carry on business for
profit as co-owners, as governed by the Uniform Partnership Act. A partnership may hold
title to real property in the name of the partnership.
A Trust
A trust is an arrangement whereby legal title to property is transferred by the grantor to
a person called a trustee, to be held and managed by that person for the benefit of the
people specified in the trust agreement, called beneficiaries.
In cases of corporate, partnership, or trust ownership , the title company will require
that it be furnished legal documents so that it may satisfy itself as to ownership rights
of the parties to the transaction and any limitations which may exist on the sale,
transfer or encumbrance of the property. Required documents may include corporate articles
and bylaws, certificate of partnership and trust agreements.
FAQs about Holding Title
Who can Take Title?
Tenancy in Common
Any number of persons. Can be husband and wife. Must be legal age.
Joint Tenancy
Any number of persons. Can be husband and wife. Must be legal age.
Community Property
Only husband and wife
How is Ownership Divided?
Tenancy in Common
Ownership can be divided into any number of interests, equal or unequal.
Joint Tenancy
Ownership interests cannot be divided
Community Property
Ownership interests are equal
Who Holds Title?
Tenancy in Common
Each co-owner has a separate legal title to his undivided interest
Joint Tenancy
There is only one title to the whole property
Community Property
Title in the "community" (similar to title being in a partnership)
Who has Possession?
Tenancy in Common
Equal right of possession
Joint Tenancy
Equal right of possession
Community Property
Equal right of possession
How do Owners Convey their Interest?
Tenancy in Common
Each co-owner's interest may be conveyed separately by its owner
Joint Tenancy
Conveyance by one co-owner without the others breaks the joint tenancy, and owners then
become tenants in common.
Community Property
Both co-owners must join in conveyance of real property. Separate interests cannot be
conveyed.
What Will be the Purchaser's Status?
Tenancy in Common
Purchaser becomes a tenant in common with the other co-owners.
Joint Tenancy
Purchaser becomes a tenant in common with the other co-owners.
Community Property
Purchaser can only acquire whole title of community; cannot acquire a part of it.
What Happens in Case of Death?
Tenancy in Common
On co-owner's death, his interest passes by will to his devisees or heirs. No survivorship
right.
Joint Tenancy
On co-owner's death, his interest ends and cannot be willed. Survivor owns the property by
survivorship.
Community Property
On co-owner's death, it goes to survivor in severalty. It goes by will to
decedent's
devisee or by succession to survivor.
Community Property with Right of Survivorship
Decedent's interest automatically passes to surviving spouse due to Right of Survivorship.
What is the Successor's Status?
Tenancy in Common
Devisees or heirs become tenants in common.
Joint Tenancy
Last survivor owns property in severalty.
Community Property
If passing by will, tenancy in common between devisee and survivor results.
What is a Creditors Interest?
Tenancy in Common
Co-owner's interest may be sold on execution sale to satisfy his creditor. Creditor
becomes a tenant in common.
Joint Tenancy
Co-owner's interest may be sold on execution sale to satisfy creditor. Joint tenancy is
broken. Creditor becomes tenant in common.
Community Property
Co-owner's interest cannot be seized and sold separately. The whole property may be sold
to satisfy debts of either husband or wife.
What is the Presumption of Law?
Tenancy in Common
Favored in doubtful cases except husband and wife (see community property).
Joint Tenancy
Must be expressly stated and properly formed. Not favored.
Community Property
Strong presumption that property acquired by husband and wife is community.
Created and managed by:
GAW Associates, Inc.
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