How to Acquire & Hold Title to Property With More Than One Person

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By Adam R. Seligman

Real estate ownership is conveyed through a title and transferred during real estate purchases and sales.  In Florida, there are various ways to take and hold the title to your property when more than one party is involved that should be considered before you buy/sell real estate, establish a partnership, or even create an estate plan.  We often hear from clients who have either lost their Homestead tax exemption protection or are forced to probate a loved one’s estate when they previously decided to use a “do-it-yourself” quitclaim deed or similar document. By trying to avoid paying a small fee ($300-$500) to correctly draft a deed, they end up paying thousands of dollars to deal with the oversight.

We always recommend that clients seek professional advice from a qualified attorney before making any changes to their title for properties. There are advantages and disadvantages to the different types of titles, and an attorney can help you sort through what’s best for your particular situation and how you may want to pass ownership in the event of a death, divorce or sale.  The information below should help you better understand the key differences between the most common forms of taking title when there is more than one person to consider. Keep in mind these are basic explanations of complicated legal issues.

Tenants In Common (TIC): Two or more people own a share of the property, which may be sold separately. TIC is the default if none of the below are described in the title. Florida law presumes equal ownership interests, unless specific percentages are written in the recorded deed. Example: “To John Homeowner and Mary Homeowner” would give John and Mary 50% ownership each.

Tenants by the Entirety (TBTE): This applies only to a husband and wife, who should be identified in the deed as “husband and wife” or “a married couple.” This TBTE status gives each spouse corresponding 100% interests (one cannot sell without the other) and rights of survivorship. There are also numerous creditor protection rights with TBTE as well. TBTE interest automatically converts to TIC status when a divorce is finalized.

Joint Tenants with Rights of Survivorship (JTRS): JTRS gives two or more unmarried co-owners legal rights to property largely similar to those granted to TBTE owners. Example: “To Mark Homeowner and Bill Landowner, as joint tenants with right of survivorship.” The JTRS co-owners would each own overlapping 100% interests. When a JTRS co-owner dies, all remaining title interests are automatically divided between the living JTRS co-owner(s). JTRS will often allow the parties to avoid the costly probate process as well.

Life Estate (LE): This is when a person’s present interest is to use a property for life, but wants to leave the remaining interest to one or more future owners. Example: “To Mary Homeowner for her life, with the remainder to her sons Bill Homeowner and Steve Homeowner.” When Mary dies the title would pass automatically to her sons as a TIC status. It is also possible to create joint life estates allowing more than one person to have full rights to use the property at the same time.

We recently had a client who mistakenly thought her mother was on title with her as Joint Tenants with rights of survivorship, when it was really as tenants in common. So what could have been an inexpensive fix, ended up costing over $5,000.00 in probate fees and costs. It is important to always discuss any title concerns with a qualified attorney.

Adam R. Seligman, concentrates his practice in the areas of residential and commercial real estate law for Ward Damon.  If you need help acquiring or transferring property title in Florida, please contact Adam at aseligman@warddamon.com or call 561-842-3000.

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