UNDERSTANDING PROPERTY TITLE
It's important to know how you intent to take title, to the property you are purchasing.
In Florida, there are several ways that you can take title of property, when purchasing real estate. It is important to understand your options, since it can have an impact later on, when you sell or transfer the property you are purchasing.
Occasionally after the closing, the new homeowners want to change how they took title to a property by adding a family member or spouse, or by transferring the property to a corporation or trust. You need to be aware that such transfers are likely to create unintended tax liabilities, or issues with title insurance. The best time to consider how to take title to the property, is prior to entering into any contract.
If you are unsure how to take title to property, we advise to speak with a
real estate attorney, who can best advise you, as to which type of title is best, in your particular situation.
Options when taking title
Tenancy by the Entirety: This is the most common way married couples take title of property in Florida. The title is held in both spouses' name and each have equal possession and ownership rights to the property. There are several protections, when taking title in this manner. For one, it requires both spouses' signatures when transferring or selling the property. Neither spouse can sign over or sell their rights to the property, without the consent of the other. It also protects the asset, in case one of the two spouses is sued by a creditor. In case of the death of one of the spouses, the surviving spouse acquires 100% ownership of the property. This form of taking title, also protects the other spouse from unknowingly losing their ownership rights, in case one of the spouses sells the property without the consent or knowledge of the other.
Sole Ownership: Is available to unmarried people, those who are legally divorced, and married people who wish to hold the property in their own names. However, if the buyer is a married person and wishes to take title in his or her own name and the property benefits from a homestead exemption, in Florida homestead laws require the other spouse to sign the deed for the transfer or otherwise formally relinquish rights to the property.
Joint Ownership as Tenants in Common: In this type of ownership, any number of individuals can hold title under Joint Ownership as Tenants in Common with the share of the property, depending on the person's financial contribution, to the purchase. Also, in this form of ownership, each owner has the right to sell, lease or bequeath (give away at death) their interest in the property to his or her legal heirs.
Joint Tenancy with Right of Survivorship. Under this type of ownership, all joint tenants have equal rights to their share in the property. In addition, due to the right of survivorship, which is not present for Tenants in Common, when a joint tenant dies, his or her share is automatically distributed among the remaining joint tenants. There are no restrictions on the number of persons that can be joint tenants under a Joint Tenancy with Right of Survivorship.
Ownership Through a Legal Entity: Rather than own a property in their own name, buyers may choose to acquire property through a separate legal entity, such as a corporation or a limited liability company. Corporations and limited liability companies can have any number of shareholders or members, but rights to the property of individual shareholders or members will be limited to the face value of the shares or membership interests each person holds. Additionally, title to Florida property may also be held in the name of a partnership of two or more persons. Partners would have equal right to possession of their respective share in the property.
"An investment in knowledge
pays the best interest."
If you are not sure how to take title to the property you are purchasing, consult with an attorney.
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