Key Definitions

Deed
A deed is the document that transfers ownership of real estate. It contains the names of the old and new owners and a legal description of the property, and is signed by the person transferring the property.

Title
A legal document evidencing a person's right to or ownership of a property.

There is a lot of paperwork required in real estate and you eventually need to understand what all these papers mean. The most important piece of paper, however, is the deed. The deed, as defined by the Land Title Institute is "an instrument, of various forms, by which title (ownership) to real estate is conveyed from one party to another."

There are several ways you can hold title to a property. Just like the title on a car, you must also have a title to the land and home that you have purchased. To take title, you must declare the form of ownership in one of several ways. Each state governs how property can be held within its boundaries, so there may be other ways to hold title than just the three discussed here. The primary forms of title are:

• Joint tenancy
• Tenancy in common
• Tenancy by the entirety

Which is best? Well, they each offer various advantages and disadvantages, depending on your particular circumstances and how you want the property to pass if you die, sell it or get a divorce (for married owners). After the transaction is completed, the settlement attorney records this transfer of the deed at the courthouse to prove to all that you are the rightful owner of the property. The American Land Title Association defines these forms of titles as follows:

JOINT TENANTS - "Two or more persons who hold title to real estate jointly, with equal rights to share in its enjoyment during their respective lives with the provision that upon the death of a joint tenant, his share in the property passes to the surviving tenants, and so on, until the full title is vested in the last survivor. A joint tenant cannot legally sell or encumber his interest without the consent or joinder of all of the other joint tenants."

If you partner with two other people to purchase a house, this may be one method of title. If one dies, title remains in the surviving joint tenant without required further action. This means if you die, you cannot leave your share to your heirs. Joint tenants are not married, thus not treated as one legal entity. If an owner wants out of the title, he or she may petition the court to divide the property or order its sale. The property can also be divided if a judgment creditor petitions the court to collect the judgment from one of the owner's shares.

TENANTS IN COMMON - "Two or more persons in whom title to a single piece of real estate is vested in such a manner that they have a common or equal right to possession and enjoyment of the property, but each holds a separate individual interest or estate in the property. Each owner may sell or encumber his respective interest or dispose of it by will, and if he dies without leaving a will, his heirs inherit his undivided."

Some state laws presume tenants in common unless the deed specifies otherwise. In this case, if one owner dies that share does pass to his or her heirs, not necessarily the surviving owner. Unmarried property owners usually use tenants in common. A tenant in common may sell his interest without approval of the other owner and, unless specified otherwise, the law assumes you meant to have equal ownership.

ESTATE BY ENTIRETIES - "An estate or interest in real estate predicated upon the legal fiction that a husband and wife are one person. A conveyance or devise to them (unless contrary intent is expressed) vests title in them as one person. Upon the death of either husband or wife, full title passes to the survivor."

Tenancy by the entirety may only be possible when the joint owners are husband and wife. This type of title provides for a common law right of survivorship, which means property goes automatically to the surviving spouse. No will, probate or other legal action is necessary, thus one spouse can not use a will to leave an interest to someone else.

This form of title follows the ancient legal theory that a married couple is one entity. Conveyance of the property must be done together and the property cannot be divided without the other. If a divorce occurs, tenancy by the entirety automatically converts to tenants in common.

Hire an Expert!
Are you shopping or planning to sell real estate on Long Island? We have extensive experience and high level New York State certified training in the business of real estate. Our modern methods reach out to the world of buyers and sellers and get results. Hiring a real estate agent is like hiring a doctor or lawyer - Why wouldn't you use the best?
 
Give us a call to feel the difference!   Visit our us at www.MyLIHOME.com or call (631) 742-1171

—-

We welcome your comments.