Six Common
Ways of
Holding Title
Holding Title
When You hold title to real property (a fancy way of referring to home ownership) you must declare how you own it. Is it owned by one or more person, and what relationship do co-owners have with one another? Is it owned in a trust account (which has tax implications)? Perhaps home ownership is in the form of a lease-purchase agreement. In that case, who actually owns the property during the lease period?
There are two basic ways title to property is held. The first is title held individually, referred to as "sole ownership." The owner could be a
The other way is title held by two or more persons or entities. If two or more people (or entities) hold title to the same property at the same time, it is referred to as "concurrent ownership."
The county recorder's office or county clerk's office keeps track of these types of legal documents. Your tax advisor and/or real estate attorney, if you have one, can offer you additional guidance, but here are the six most common ways that title is held:
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A single man / woman - a person not legally married (e.g. John Doe, a single man)
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An unmarried man / woman - A person who has been married and is now legally divorced (e.g. John Doe, an unmarried man)
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A married man / woman, as his sole and separate property - A person may wish to acquire property alone. The spouse must give consent, by quit-claim deed, to relinquish all rights, title, and interest in the property (e.g. John Doe, a married man, as his sole and separate property).
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Community property - The Civil Code of most states define community property as property acquired by husband and wife, or either, during marriage, when not acquired as the separate property of either. Real property conveyed to a married person is presumed to be community property unless otherwise stated.
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Joint tenancy - A joint interest is one owned by two or more people in equal shares. The key point is the right to survivorship. When one joint tenant dies, title is immediately vested to the surviving joint tenant.
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Tenants in common - Unlike joint tenancy, co-owners own undivided interests, but unlike joint tenancy, the interests do not have to be equal in quantity or duration, and may arise from different times. There is no right of survivorship: each tenant own an interest which on his or her death vests in his or her heirs or devisees.
Other ways of vesting title include:
Corporation - A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having an 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 the beneficiaries.
*In cases of corporate, partnership or trust ownership the title company will
Tell us how you'd like to hold title well before your closing. This way, all of the forms will be ready for you at signing.
What to change the way title is held? If you own a home and are holding title together with someone else, let's use a married couple as an example, and want to change the way you've vested the property--perhaps you're divorcing--then one party can sign away their claim to ownership using a Quit Claim Deed. Only after the Quit Claim Deed is properly recorded by the County Clerk's office is the property vesting is changed.
After the recording process is complete, the existing lender should also be notified to update the mortgage note, too.
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