Buying real estate has challenges. Whether it is a house, a small apartment, a condo or even a plot of land – there many factors to consider. Cost, amenities, location, age, size must all be considered. In an effort to get more of what you want you may consider joint ownership with someone besides a spouse. This could be a significant other, a roommate, a friend or a business partner. When multiple persons own real estate, the manner in which they take title will define the relationship and ownership.
The default manner of title for joint ownership is that of Tenants in Common. This tenancy grants each owner a share of the property that is entirely their own. Each owner has the right to sell or dispose of their share of the property in the manner they deem fit. An indebted owner can have their share possessed by a debtor who could then have the portion sold regardless of what a non-indebted owner says.
If the owners want to ensure the property remains whole and intact, then Tenants in Common is not the best option. Taking title as Joint Tenants with Rights of Survivorship,will offer more protection. This tenancy somewhat mirrors the protections of Tenants by the Entireties as neither owner can dispose of their share as they deem fit. In this tenancy, when one of the owners dies, then the surviving owner(s) shares automatically vest in the remaining owner(s).
How title is vested is critically important for unmarried owners. Tenants in Common have full rights to their shares, to do with as they see fit. Tenants with Full Rights of Survivorship cannot dispose of their shares, as the shares are set to remain with the surviving owner. For both tenancy types, debtors can latch onto the property to satisfy debts.
The Kendrick Law Group has significant experience in advising clients on title vesting and ownership options and can help you navigate the complexities of such an investment. Contact our team of attorneys at the Kendrick Law Group and Champion Title & Closing if you have any questions about your current or future real estate transactions.