Do you own a home? Do you plan on buying one in the future? If so, it is important to understand what rights that ownership entails. One of those rights is the right to transfer ownership of property. Ownership of property can come in many forms. For example, a person may own the land and improvements which are on it; or they may own shares in a corporation that owns the property. The form of ownership will determine what rights a person has to use and dispose of the property.
In real estate, ownership interest in a property refers to the rights that one or multiple owners hold on the investment. In the case of multiple owners, the ownership interest is usually split based on the amount invested in the property. When ownership is held by you, interest in real estate, you hold the highest form of interest possible. It comes in several different forms with "fee simple absolute" being the most common, carrying the most ownership rights.
When you have an ownership interest in a property, you’ll be allowed to use it within reason. For example, if you have an ownership interest in an investment property with other investors, you would be entitled to an appropriate share of the profits. If you own a piece of real estate, then it's yours to do with as you please and if your land is damaged or taken away from you unjustly, then according to the law you’d be compensated for your loss. You also have the rights over what happens when you choose to sell your property- even if it’s mortgaged and owned by someone else!
Following are some common types of ownership interests in property:
As the name suggests, the ownership belongs to a single individual. The major benefit is that you have the sole decision power to do whatever you want, but the downside is the complexity of the paperwork.
In a joint tenancy, two or more individuals have equal shares of the property. Each partner enjoys equal profits or losses. If a person dies the ownership passes to the living individual, this is known as the right of survivorship.
It’s the same as the joint tenancy but the percentage of ownerships can vary among different individuals in the agreement. Survivorship laws are not included in the tenancy in common arrangements
Tenancy by the entirety refers to property ownership in which a wife and husband have equal shares of real estate assets and any income generated by it If the couple divorces, the two owners automatically become tenants in common.
To know more about legalities and requirements related to properties, visit us at www.prudentialcal.com.