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Even attorneys and real estate professionals with hands-on experience in the home-buying process can get confused when it comes to the moving parts of the transaction and the different ways of holding real property title in Florida.
Carefully considering how your clients will take the title of a property is critical. Many kinds of ownership exist and each type lends unique advantages and disadvantages.
In the blog below, we explain the different ways title can be vested in Florida to help you and your clients find the best option.
1. Sole Ownership
Sole ownership of residential real estate is a title ownership option that most people choose when buying a home. It’s the simplest form of real estate ownership for non-married individuals or married individuals who wish to assume the sole title for investment purposes. For example, a married person can invest in real estate as long as their spouse signs a quitclaim relinquishing any ownership rights in the property.
However, it’s essential to consider that sole ownership has no tax benefits or estate planning benefits for the owner. So, when the sole owner passes away, the property will be passed through the probate courts, increasing the time before passing down the property to heirs as well as the cost of the process.
2. Tenancy in Common
Tenancy in common is the process through which two individuals who are not married to each other can take joint ownership of a property. Each tenant owns a specific interest in the property, and the percentage of ownership is highlighted on the deed.
One key benefit of this style of property ownership is that the owner of the shares may pass their percentage interest down in their will. On the other hand, co-owners may end up owning a property with a stranger after the original buyer’s interest is inherited.
3. Joint Tenancy
Joint tenancy is a strong alternative to tenancy in common and is typically used among family members to keep the family’s interest in a property current. Under a joint tenancy agreement, all owners must take a joint share in the property and must have taken their joint interest at the same time. When a tenant passes away, that tenant’s rights pass equally to the other tenants. The process helps avoid some probate costs and delays associated with sole ownership.
4. Tenancy by the Entirety
Tenancy by the entirety is created by two individuals who are married to each other at the time that the property was acquired. Each spouse holds an equal share to the property, and their rights cannot be relinquished as long as they are both alive and remain married. If tenants divorce, they are considered to own two separate but equal shares in the home.
Choosing a title style can have a significant impact on your client’s property rights further down the road. It’s vital to discuss options with a title specialist and find out more about the benefits of each style of title ownership.
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