How to hold title?
June 12, 2020 | Iulia Zecheru
When 1 person owns the property individually, then the property is owned in severalty.
But when more than 1 person own the property, then the owners have to choose how they hold title from multiple options. It’s very important to decided how to hold title when multiple owners are involved because how the owners hold title will affect the control and the use of the property.
In California, there are 3 options to hold title for co-owners:
- Tenancy in common is usually chosen when the owners are not married and each has an undivided interest in one property. There is a lot of flexibility in this form of co-ownership. Each tenant in common has a right to share possession of the whole property, which is called unity of possession. Tenants in common may have equal or unequal interests. For example, one can contribute 70% and the other 30% to the purchase of the property. In this case, the owner should specify the percentage in the deed.
When holding title as Tenants in Common, there are some legal rules that need to be enforced:
- right to contribution: tenants in common have to share the property’s expenses based on their percentage of ownership.
- right to profit: tenants in common have the right to profit from his share of the property. If the property is rented, each owner will receive a certain amount based on their percentage of ownership.
- waste: tenants in common can’t damage the property reducing in this way its value.
2. Joint tenancy is another form of holding title as co-owners. Just like Tenancy in Common, Joint tenancy share undivided interests in the whole property. A difference between Tenancy in Common and Joint Tenancy is that Tenancy in Common is an interest that passes to the owner’s heirs compared to the Joint Tenancy where it passes automatically to the other surviving owner(s). This is called Right of survivorship.
There are 4 units that need to take place for a Joint tenancy:
- unity of possesion – all tenants have the right to occupy the entire property
- unity of title – the owners have to receive the ownership from the same deed
- unity of interest – the owners must have the same interest in the property
- unity of time – all owners must take title of the property at the same time.
3. Community property is used in several states, including California. The community property law recognizes 3 types of couples: married people, registered domestic partners, and unmarried cohabitants (last category can’t own community property). in 2001, California has allowed married couples to hold title as community property with the right of survivorship, which means that the title passes directly to the surviving spouse.
One spouse can own separate property if it was acquired before marriage or during marriage by inheritance, gift or will. Anything acquired after marriage is considered community property.
Source: Principles of California Real Estate, Rockwell Publishing, Seventeenth Edition