Options for Co-owning Property
If you want to buy a home or rental property with a friend, family member or romantic partner, you need to research the various ownership options available. Owning a property with another person may seem like a simple prospect, but you should consider the future. What happens if someone passes away or if you and the other owner have a falling out? Do you want to be able to get out of the situation easily or are you both in this together for the long haul? Before you jump into co-ownership, speak with experienced West Palm Beach residential real estate attorney Larry E. Bray. He can explain your various options, including the benefits and disadvantages of each.
Tenancy in Common
Two or more people can own a property as tenants in common. Everyone who owns the property has equal claim to all areas of that property. For example, if you and a friend own a home as tenants in common, you both have the right to enjoy the entire house together.
Tenants in common can be created at any time. If you and your friend own the home, you can later welcome a third person into the mix. You may each own one-third of the property or hold the property in other proportions. For instance, you may own 50 percent of the property while your two friends each own 25 percent. This does not change the fact that you all have equal rights of enjoyment.
If one of the owners of a property passes away, he can leave his share of the property to anyone he chooses. There is no requirement that his portion revert back to the other owners. This can be a problem. You may become a co-owner of a property with someone you do not know well or have an amicable relationship with. Then you must share the property and responsibility for maintenance and costs. It is important to note that each person can sell their interest in the property, leaving you with a similar outcome.
Joint Tenancy with Right of Survivorship
Joint tenancy with the right of survivorship is very different than a tenancy in common. Multiple individuals can own the property and are all able to enjoy it. However, while tenants in common can own different portions of a property, joint tenants must hold equal shares. If you are to own a home with another person as joint tenants, you will each own 50 percent of the house.
Additionally, a joint tenancy must be carefully created. It cannot be created at any time like a tenancy in common, but instead must be all of the owners at the same time. To be lawfully complete, the joint tenancy must fulfill four factors: time, title, interest, and possession. Also, Florida law requires that the title and deed specifically state “with the right of survivorship.” Otherwise, a person’s portion of ownership can go to whomever that person chooses.
If one of the owners of a property owned as a joint tenancy with the right of survivorship passes away, that person’s share of the property goes to the surviving owner.
Tenancy by the Entirety
While both tenancies in common and joint tenancies can be between anyone, tenancies by the entirety are only allowed for legally married individuals. To create a tenancy by the entirety, you and your spouse must fulfill all of the formation requirements of a joint tenancy – time, title, interest, and possession – but also be legally married at the time the property is acquired. If you own a property as a tenancy by the entirety, you cannot transfer your ownership to anyone else.
If one of you passes away while owning a home as a tenancy by the entirety, the other receives the entire property as the sole owner. A divorce will cause you and your ex-spouse to become tenants in common for that property.
Contact a Florida Real Estate Lawyer
If you and another person want to own property together, there is no reason not to do it the right way from the very beginning. Larry E. Bray can explain the various ownership options as well as which may be right for you. Contact the Law Offices of Larry E. Bray P.A. in Florida at 561-571-8970 to schedule a consultation.