In property law, a title refers to a “bundle of rights” in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the “bundle” may be separated and held by different parties. (1) Title may also refer to a formal document, such as a deed, that provides evidence of ownership.
When we refer to “Title Vesting,” we usually refer to how someone will “take title” on a property that they are purchasing or that is being transferred to them. When a title deed is written for real property, ownership is described using the name of the owner(s), and often a phrase which describes the legal relationship between multiple owners or married persons. (2)
There are two basic ways title can be taken: as a sole owner of the property, or with multiple parties having an ownership stake.
Sole ownership is the simplest form of property ownership and applies when a person is not married, or if they are married, is taking possession of the property separately from their husband or wife.
When multiple parties own a property together, there are several ways that one can “take title,” including “tenancy by the entirety,” “tenancy in common,” or “joint tenancy”. The differences in these forms include:
In a “ tenancy by the entirety,” the owners MUST be married. In this case, the “marriage” is the owner of the estate and both parties have a “right of survivorship,” meaning that upon death of one of the parties, the entire ownership passes solely to the other party.
Ex: “John Smith and Mary Smith, husband and wife”
A “ tenancy in common” is held by two or more persons, with each having undivided interest in the whole property. The title can be created in the same or separate deeds, at the same or at different times. Each party can have equal or unequal shares of ownership, and all parties have equal rights of use and possession. Each party can sell their ownership stake without the consent of the other parties without affecting the rights of the other party. Each party also has the right to transfer ownership to their heirs in their wills, therefore, in “tenancy in common” does NOT have a “right of survivorship”.
Ex No. 1 (Each owner has 50%): “John Smith and Carlos Perez”
Ex No. 2. “John Smith, as to an undivided 20% interest and Robert Martinez, as to an
undivided 80% interest”
“Joint tenancy” exists when two or more persons with equal and undivided interests take possession of a property. All the owners must have equal rights of use and possession, and must have acquired ownership at same time by same deed. Joint tenancy has a right of survivorship, meaning If one of the owners of the property dies, the remaining owner or owners of the property receives the decedent’s share of the property, not the heirs of the decedent. The grantee must be listed with survivorship language as in the example below.
Ex: “John Smith and Carlos Perez, as Joint Tenants with Rights of Survivorship”There are other ways to own property, especially when estate planning is a relevant factor.Real estate agents should avoid describing vesting to their clients. Differences in vesting can have tremendous unforeseen legal consequences, especially in the case of an untimely death or divorce. Any questions or concerns that arise, should be discussed with our office. (2)
For more information, please feel free to contact Ricardo Teran at
ricardo@foliotitle.com or to our office at 786-888-1599.
References
(1) Wikipedia. Title (property).
(2) Zillow. http://www.zillow.com/wikipages/Taking-Title-or-Vesting/