Real estate is a type of real property that includes natural fixtures and man-made features. People own real estate as their residence or other purposes, such as for investment purposes by holding it as a rental property. Ownership of any real estate for any purpose is known as a “title.” There are several ways to hold a title in a piece of real estate, and it is important to know the differences to understand which title best fits your needs if you decide to purchase or invest in any real estate property. The following four ownership types are among the most common in property law.
Joint tenancy
A Joint tenancy occurs when two or more people jointly hold title to real estate, and these individuals enjoy equal rights to the property during their lives. If one of these tenants dies, their ownership rights pass to the surviving tenant(s) through a legal relationship called a right of survivorship. Tenants can enter a joint tenancy simultaneously, which usually occurs through a deed.
Tenancy in Common
This type of ownership occurs when two or more individuals jointly hold title to real estate property, with equal or unequal ownership percentages. As a result, tenants enjoy equal access and use of the property, and this interest percentage determines the financial ownership and responsibilities of the real estate.
Tenancy by Entirety
This ownership is unique because it can only be used when the tenants are legally married. Tenancy by Entirety assumes the married couple is one person for legal purposes. Therefore ownership is conveyed to the couple as one.
Sole Ownership
It is self-explanatory: ownership by one individual (or entity legally capable of holding the title).
Classification Matters
The type of ownership has over a piece of real estate is essential for legal and taxation purposes. The methods of owning real estate are subject to the state’s law in which the property is located, so familiarity with your state’s laws is fundamental in determining the legal implications of your property ownership. Because property laws can be complex, it is wise to seek assistance from a lawyer specializing in property law in all of your property matters, disputes, and answer-seeking. Contact Laizure Metz Legal Services at christopher@laizuremetzlegal.com or phone at (347) 625-7854.