Property Titles and Ownership of a Property
Real estate has always been a valuable commodity and continues to be as people buy property for personal and investment reasons. There can be questions about property titles and taking ownership of the property.
The most important aspect of property titles is the vesting of the title. This concerns the form of ownership taken. This dictates who can sign the documents related to the property and who has future rights of ownership.
Future rights of ownership can tie into taxes of any sort, the ability to transfer the title, and liability to creditor’s claims. How property titles are vested potentially plays a major role in probate in the event of a death.
It is a good idea to talk to a lawyer when it comes to how you want property titles to be secured. This can be especially important if the property has multiple owners. Protecting your rights is the most important thing no matter what.
Here are a few definitions that can help. These give you an overview for everything you need regarding property titles and the holding of the title. Still, don’t use these as legal definitions. If you need further information about property titles or legal definitions, speak to your lawyer.
Common Methods of Holding the Title and Other Property Titles Definitions
Common methods of holding title include:
- Sole Ownership
- Trustees of a Trust
- Limited Liability Companies (L.L.C)
Sole ownership in regards to property titles: ownership by an individual or entity capable of acquiring the title. Examples are a single person, an unmarried person, or a married person who is purchasing the property solely in their name.
- Single individual – The individual has never been legally married.
- Unmarried individual – This person may have been married but is legally divorced at the time of purchase.
- Married individual – The individual wishes to acquire the property title in his or her name only. The spouse has to legally relinquish his or her right, title, and interest in the property. This legally establishes the buyer as the sole and separate property owner.
Co-ownership of Property Titles
The title to a property can be owned by two or more people. You can do this in the following ways:
- Community Property. A form of vesting title to the property owner by a wed couple during their marriage which they intended to own together. Since the property there is equal ownership, both have to sign all documents of transfer. They both have the right to dispose of half of the community property (transfer by will). Community property is different from separate property. Separate property is different. This is a kind of property that was acquired before the marriage, by separate gift, after legal separation, or with an agreement to be owned by only one spouse.
- Joint Tenancy. A form of vesting property titles to property owned by tow or more people. These people can be married but don’t have to, have equal interest, and are subject to right of survivorship by the surviving joint tenant. Property titles are acquired at the same time, by the same conveyance, and the document has to specify the intention to create a joint tenancy estate. Should the joint tenant pass away, the title to the property transfers to a surviving tenant or tenants. This means joint tenancy property is not subject to disposition by will.
- Tenancy in Common. This form of vesting property titles to a property owned by two or more people in fractional interests. These interests can be unequal or have different time periods. Each tenant in common will own a share and gets a comparable portion of the income from that property. Each co-tenant can sell, lease, or dispose by will that share of the property.
This is a legal entity that has one or more shareholders. Regarded under law as having an existence separate from its shareholders, is a corporation and may hold the title as such.
Partnerships in Property Titles
An association of two or more individuals who conduct business as co-owners for profit is a partnership and may vest title as such.
Property Titles As Trustees of a Trust
An arrangement wherein legal title to a property results in a transfer by the grantor to an individual named as a trustee. Held and managed by the trustee for the benefit of the beneficiary or beneficiaries specified in the trust agreement.
Limited Liability Companies (L.L.C)
A form of ownership that is similar to both the corporation and the partnership. The difference here is that the operating agreement determines how the L.L.C. functions and taxation. As with the corporation, the L.L.C. existence is separate from the owners’.
Note: In cases of corporate, partnership, L.L.C., or trust ownership, required documents may include:
- Corporate articles and bylaws
- Partnership agreements
- L.L.C. operating agreements
- Trust agreements and/or certificates