How you take title of your home is crucial. Title is the term for ownership and the names listed on the deed are the legal owners of the property. If you are single, then your choice is easier because in most cases you will take title as the sole owner. However, if you are married or buying the home with a partner your choices multiply. Each option has certain legal, ownership, and tax advantages and disadvantages.
A sole owner owns 100 per cent of the proper ty and is the only name listed on the title/deed.
Joint tenancy provides two or more people equal undivided interest in the property with rights of survivorship. All joint tenants must agree to a sale and sign the deed to sell the home. This is a common choice for married couples because when one joint tenant is deceased, his/her share transfers to the survivor regardless of what is stated in the deceased spouse's will. Taking title as joint tenancy may prevent the home from entering probate proceedings in the event of death. Joint tenancy is not limited to married couples, but two or more people must co-own the property.
A few states like California allow you to take title under community property. Community property claims are available only to married couples. Community property laws generally presume each spouse owns a 50 per cent interest in all property acquired during the marriage. Community property differs from joint tenancy because the property does not automatically pass to the surviving spouse upon death. You may will your community property to whomever you wish.
Tenancy In Common
Unrelated partners sometimes choose Tenancy In Common. Each partner owns a portion of the property and can be equal interest or not. Unless otherwise agreed, each partner has the right to sell his/her interests in any way at any time without consent of the other partners. Unlike joint tenancy, when a partner dies, that portion of the ownership becomes part of the deceased partner's estate and is subject to the provisions of his/her will.
Serious consideration should be given to how you take title of your home. Unexpected situations can arise and you may want to be prepared to handle them beforehand. Your final agreement should stipulate each partners' rights and obligations regarding, among other things, how to buy-out a co-owner if all owners do not wish to sell, distribute maintenance and repair costs among owners with an unequal share in the property , resolve disputes regarding the property like painting, landscaping, etc., and the actions to be taken if a co-owner does not contribute his/her share of the mortgage payments, taxes, insurance, and other costs. As with any agreement that may have legal consequences, this type of agreement should be drafted or reviewed by a legal professional.