Common Ways of Holding Title

Title to real property may be held by individuals, known as Sole Ownership, or by two or more individuals, known as Co-Ownership. Examples of the common vesting cases of Sole and Co-Ownership are listed below. (*ownership varies by state - check with your escrow holder/closer or attorney)

1. Sole Ownership - A single Man/Woman: A man or woman who has not been legally married.

2. Unmarried Man/Woman - A man or woman who has previously married and is now legally divorced.

3. Married Man/Woman, as His/Her Sole and Separate Property - A married man or woman who wishes to acquire title in his or her name alone. (The title company insuring title may require the spouse of the married man or woman acquiring title to specifically disclaim or relinquish his or her right, title and interest to the property. This establishes that it is the desire of both spouses that title to the property be granted to one spouse as that spouse's sole and separate property.)

4. Co-Ownership - A property owned by two or more persons.

a. Community Property - A form of vesting title to property owned by a 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 in writing to be owned by one spouse.

In California, real property conveyed to a married man or woman is presumed to be Community Property unless otherwise stated. Since all such property is owned equally, husband and wife must sign all agreements and documents transferring the property or using it as security for a loan. Under Community Property each spouse has the right to dispose of one half of the Community Property, by will.

b. Community Property with Right of Survivorship - A form of vesting title to real property owned by a husband and wife during their marriage which they had intended to own together. This form of holding title shares many of the characteristics of Community Property but adds the benefit of the Right of Survivorship similar to title held in Joint Tenancy. There may be tax benefits for holding title in this manner. On the death of a spouse the decendant's interest ends and the surviving spouse owns the property by survivorship and owns the property in severalty.

c. Joint Tenancy - 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 a Joint Tenancy estate.

When a joint tenant dies, title to the property is automatically conveyed by operation of law to the surviving joint tenant(s). Therefore, Joint Tenancy is not subject to disposition by will.

d. Tenancy in Common - A form of vesting title to property owned by any two or more 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 an equivalent share of expenses. Each Co-Tenant may sell, lease or will to his or her heir(s) that share of the property belonging to him or her.

5. Corporation - 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.

6. Partnership - An association of two or more persons who 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.

7. Trustees of 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.

8. Limited Liability Companies (LLC) - This form of ownership is a legal entity and is similar to both the Corporation and the Partnership. The operating agreement will determine how the LLC functions and is taxed. Like the corporation, its existence is separate from its owners.

Article provided by Old Republic.