When you are looking to buy a home, you are faced with a number of important choices: from location to good schools to square footage. One of the most important questions you'll need to answer right away is what type of home ownership you want to have. For instance, do you want to have sole ownership or do you want to own the property with another person jointly? Do you want an undivided interest in the entire portion of the real property?
This article will explore the different forms of homeownership, including fee simple, joint tenancies, and more.
The most common form of ownership is the fee simple absolute. The fee simple type of ownership has the following features:
When a condominium or townhouse is purchased, the owner typically purchases the residential unit in fee simple and obtains the right to use the community property. Each unit has its own tax bill, deed, mortgage, and ownership rights but shares in the maintenance of the common areas.
In this type of property ownership, each owner holds an undivided share of the estate. There is a right of survivorship, which means on the death of one joint owner, the surviving owner or owners hold an undivided right to the entire estate. This ownership is not subject to the rights of the deceased co-owners' heirs.
In a title held as a tenancy in common, each owner has an undivided interest in the entire property. Each tenant has the right to possession of the whole property. There is no right of survivorship. Each tenant has a distinct proportionate ownership interest, which passes by succession. There is a presumption that a transfer to two or more persons is a tenancy in common.
This is a marital estate, which can only be created between married couples. It is similar to a joint tenancy except that the right of survivorship cannot be destroyed since severance by a surviving spouse is not possible.Â
In many states, there is a presumption that a tenancy by the entirety is created in any transfer to a husband and wife. This type of title is considered somewhat archaic and the majority of states have abolished this type of tenancy, favoring instead that the couple takes title to the property as joint tenants with right of survivorship.
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Buying a home is a big undertaking. Before you sign on the dotted line (dozens and dozens of times), make sure your legal interests are protected by speaking with a real estate attorney who can explain the different types of homeownership and recommend the best one for your particular situation.
