Types of Home Ownership Overview
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 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 much more.
The most common form of ownership, when a homeowner purchases a home, is the fee simple absolute. The holder of a title in fee simple has full possessory rights now and in the future for an infinite duration. There are no limitations on its inheritability. The holder of the estate can sell the entire estate or any part of it and dispose of it by will at time of death. When a condominium or townhouse is purchased, the owner typically purchases the residential unit in fee simple and obtains the right to use the common areas. Each unit has its own tax bill, deed, mortgage and ownership rights but shares in the maintenance of the common areas.
Joint Tenancy with Right of Survivorship
In this type of title 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 retain an undivided right to the entire estate, which is not subject to the rights of the heirs of the deceased co-owner.
Tenancy in Common
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 interest in the property, which passes by succession. There is a presumption that a conveyance to two or more persons is a tenancy in common.
Tenancy in the Entirety
This is a marital estate, which can only be created between a husband and wife. It is similar to a joint tenancy except that the right of survivorship cannot be destroyed, since severance by one tenant is not possible. An existing marriage is requisite for a tenancy by the entirety. In many states there is a presumption that a tenancy by the entirety is created in any conveyance 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 take title to the property as joint tenants with right of survivorship.
Types of Home Ownership: Related Resources
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Need Help Deciding Which Type of Home Ownership Is Best for You? Talk to a Lawyer
Buying a home is a big undertaking, and one that requires a lot of time and energy. 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 home ownership and recommend the best one for your particular situation.