About
Deeds and Title
You Can't Own A Home Without It...
There's 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.
So again, what is a real estate
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.
And, what is a real estate Title?
A legal document evidencing a person's right to or ownership of a property.
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