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Real Estate Titles-What are They and Which Do I Need?

Individuals who own real estate possess a deed to show this ownership. However, several types of real estate titles exist today, and this confuses many individuals. Every person must know the different titles to ensure they get the correct one for the property they own. They must also understand how a title differs from a deed, as many people confuse the two terms. 


Property Titles and Deeds

A property title is a legal right an individual has to a property. With this title, the owner receives access to the property and may sell or transfer the property to another party. In addition, this title gives the owner permission to enjoy and use the property as they wish, so long as they do so legally. The title is the legal concept of ownership rights. 

A deed, in contrast, is the actual document which provides the individual with the legal title rights. This deed is necessary to transfer these rights from one party to another. The office of the county clerk holds this document, which contains the property description and information about the buyer and seller. For this document to be official, both parties must sign it. 

Once a person understands the distinction between a title and a deed, they must know about the real estate title forms and when they should use each one. A person should consult with an attorney to ensure they get the correct title for the property being purchased. 

Real Estate Title Forms

Real estate titles come in several forms. The form provides information about who owns the property. When multiple people share a title, legal authorities refer to this as joint possession. What are the different basic real estate titles? 

Fee Simple

Fee simple means a person owns the property described in the title. This remains the most common form of title today when discussing real estate. A person receives an interest in a property when they purchase land or someone gifts it to them. 

Authorities refer to this as fee simple because the individual’s interest in the land won’t end because of a condition or event. This title holder keeps complete and full rights to the property. 

There is no time limit on this right. In addition, the title holder may sell all or part of the property. They also may transfer the property to an individual or entity in their will when they pass away. 

However, if the title says fee simple, this means the owner placed conditions on this property transfer. An owner wants a fee simple absolute title on the property because this means there are no conditions placed on their ownership of the property when this property exchanges hands upon the owner’s demise. 

Joint Tenancy

A joint tenancy title lets others know the property in question is owned by two or more individuals or entities. Each owner holds an undivided share of this property. When they pass away, the surviving owners keep their undivided share. In certain states, the joint tenants must state whether this right of survivorship exists. 

Many purchasers choose this option as they wish to avoid the need for probate upon the death of one or more owners of the property. With joint tenancy, the property defaults to the surviving tenants. The tenants are not required to be married or related for this transfer to occur. 

Each tenant bears responsibility for the property. This does not fall on one owner, which is beneficial. The financial burden of matters related to the property belongs to all tenants with this title option. 

However, all tenants must agree when making decisions regarding the property. This includes decisions regarding financing the property and those related to its use for financial gain. In addition, an owner cannot transfer their share of the property to another party through their will. The property automatically goes to the surviving tenants. 

Tenancy in Common

A tenancy in common is like a joint tenancy, with one major difference. There is no right of survivorship with a tenancy in common. Each owner has a proportionate interest in the property. The property changes hands in accordance with succession laws of the state where the property is located. Many people prefer this title form. 

Tenants are not required to have equal shares in the property. One owner may hold 70 percent while another owner holds 30 percent. However, all owners share all aspects of the property. The person with majority ownership cannot restrict the other owner in terms of their use of the property. The only thing affected by the interest percentage is the financial ownership of this property. 

Each tenant keeps the right to dispose of or encumber their portion of the property as they desire. Owners can enter this type of title at any time, and ownership can be willed to another party or transferred to an individual’s heirs undivided.  

Each owner may use their portion of the property as collateral. If a person or entity places a lien against the property, this lien only goes against the portion of the property owned by the individual responsible for the debt. 

However, a tenancy in common doesn’t allow for automatic survivor’s rights. Furthermore, tenants share all debts on the property. If one owner doesn’t pay their portion of a debt on the property, the other owners become responsible for this portion. Finally, before a total transfer of ownership may occur, the owners must clear any liens on the property.

Tenancy in the Entirety

When two spouses have joint ownership of a property, this is a tenancy in the entirety, and the spouses are treated as a single entity. Each spouse may hold and use all the property named in the title. When one spouse passes away, the surviving spouse takes full possession of the property and the title. However, neither spouse can sell all or part of the property without the other party’s permission. 

Only two spouses may hold a tenancy in the entirety. With this form, there is no way to destroy the right of survivorship. As a result, many states have opted to eliminate this title form. They direct married couples to a joint tenancy complete with the right of survivorship. 

Subdividing the property is not permitted, however, when the parties possess a tenancy in the entirety title. If the parties choose to divorce, the court automatically converts this title to a tenancy in common. This allows one spouse to transfer ownership of their part of the property to another party. This may be the former spouse or a third party. 

Furthermore, a person or entity must determine whether they want sole ownership of a property or if this real estate should be community property. Each has its advantages and drawbacks as well. An attorney can be of help in determining which option is appropriate for the purchase in question. 

Many individuals express confusion regarding which type of title they want for a property they are purchasing. Stelzner Law Firm, based in Rock Hill, South Carolina, works with clients to determine which title option is in the client’s best interests. In addition, they work with clients to determine when the client needs title insurance and why it may be necessary. Contact Stelzner Law today for help with any real estate title matter, as an owner must protect their investment at all costs. 

Stelzner Law Firm also offers legal support for landlords and tenants.  Visit this Stelzner Law article for additional information.