A Comparison of the Different Types of Home Titles
When buying any form of property in Florida, you will need to make a decision on which title company you will use. Florida has a few different options available to the potential homebuyer, each with their own specific benefits. These benefits affect how the property is treated it when it comes to taxation, asset protection, and estate planning. Therefore, it is very important to speak to an expert on these matters, but in the meantime here is a brief summary on the few different options available to you.
Sole ownership is the most basic form of a real property title. This is when only one person holds the title in their name. This person can be single, divorced, or even married, but if married there are some additional steps to be taken. The spouse of the title holder may have to renounce their right to the property to prevent having to sign a deed when the property is sold. Creditors can levy on the title holder’s interest to repay a debt owed to the creditor unless it is the property owner’s homestead.
There are three forms of joint ownership of a home title; the first is Tenancy in Common. In Florida, unless stated otherwise, two or more persons holding title, hold as tenants in common. Ownerships are considered to be Tenancy in Common unless otherwise stated. A co-owner who is a Tenant in Common can sell, lease, or make a testamentary transfer of his or her share through their will to their heirs. Since there is no right of survivorship when one tenant dies his or her share will transfer according to their will and the other tenants have no right to it unless otherwise stated. This allows for unequal shares among tenants, which may favor some potential buyers. Similar to sole ownership there is no creditor protection.
The second form of co-ownership is Joint Tenancy with Right of Survivorship. The tenants will have unified interest in the property. Since the tenants have equal interest in the title, they must also have equal shares. They also each have the right to occupy the whole property. Here, with the right to survivorship, if a tenant dies the other tenant or tenants each gain an even split of the deceased’s share. Yet if a single tenant takes a mortgage on their share, this is considered to break joint tenancy and the lender has only undivided fraction of interest equal to the borrower’s share, without affecting the other tenants.
The final type is Tenancy by the Entireties, this is specifically for married couples. It is very similar to joint tenancy, where both have equal shares and right of survivorship stands. Though the added benefit is that the creditors of one spouse cannot levy their share alone, both parties must share a creditor. The only way to end this title is a joined agreement or divorce, then the title will change to tenants in common.
Some other forms of ownership
In Florida it is not required that you hold a title in your name, it can be through a corporation, limited liability company or even a partnership. Under these circumstances there can be any number of shareholders and their right to the property will be limited to their membership interests. Same goes for partnerships, with partner having right to their respective share of the property.
Lastly, a Florida Land Trust can be set up, where the title is given to a trustee for them to handle for defined beneficiaries. This tactic allows for anonymity, since the selling price and owner’s name are withheld from the public.