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If the couple divorces, the two owners automatically become tenants in common. If either the wife or husband dies, the title is transferred to the surviving spouse in its entirety. One of the main advantages of this type of ownership is that it offers rights of survivorship. Tenancy by the entirety refers to a property ownership in which a wife and husband own equal shares of a real estate asset and any income generated by it. Unlike a joint tenancy however, a tenancy in common does not include rights of survivorship.įurthermore, a tenancy in common does not provide equal use, rights, or income, whereas a joint tenancy does grant equal shares to all owners. In both scenarios, the asset is co-owned by two or more parties. While they may look similar at first glance, these two types of property ownership differ in several ways. In the event of death, the decedent’s share is acquired by their heirs, who then enter into the tenancy-in-common agreement with the other surviving owners.Ī tenancy in common is another pretty popular type of commercial property and land ownership. Survivorship rights are not included under a tenancy in common. This type of ownership however can be split into different percentages among the tenants, hence it does not provide equal use, rights, or income. Tenancy in CommonĪ tenancy-in-common property is owned by two or more persons at the same time. Lastly, joint tenants are liable for their share of property maintenance and repair costs. Joint tenancies also have tax consequences. For example, estates exceeding $600,000 at the time of death are subject to state estate and federal taxes. In addition, each tenant must agree to the sale or transfer of the property, which can be very limiting. For example, if one of the tenants has unpaid debts, a creditor is legally entitled to collect what they are owed through the forced sale of the asset. Joint tenancies however also come with a number of drawbacks, which can add a certain element of risk. In order to enter into a joint tenancy agreement, the property conveyance or deed need to specifically state that a joint tenancy and rights of survivorship have been created. Unlike probate, right of survivorship allows for ownership to be passed on easily after the death of one party. This means that if one or multiple tenants die, the ownership passes on to the surviving tenant. One of the most important aspects of a joint tenancy agreement is the right of survivorship. The tenants are entitled to equal rights, income, and use of the property, and can also benefit from sharing the mortgage and tax payments.Ī joint tenancy is one of the most common types of land ownership. With a joint tenancy, two or more tenants own equal shares of a property. Sole ownership is commonly used for multi family rentals like duplexes and triplexes, small retail properties, as well as land. In order to transfer the title, a sole owner’s heirs will need to probate their estate, which can be a costly and time-consuming process. As you will see in the upcoming sections, this is not the case with property ownership scenarios such as joint tenancy and tenancy in common.Ī major drawback of sole ownership however, is the added complexity for a property owner’s heirs.
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The biggest appeal of sole ownership is that decisions about the property, such as how best to use it or when to sell, do not need to be approved by tenants or any other party aside from the owner.
#TENANT PRO 6 FULL#
In this scenario, the full ownership of the real estate asset belongs to a single individual. Let’s take a detailed look at seven of the most common types of property ownership: When looking to purchase commercial property, it is always wise to consult with a lawyer not only specializing in real estate, but also practicing in the state where the property is located.ĭifferent types of ownership may be preferential for commercial property owners in different locales due to varying laws and other factors. In this post, we will review the different types of property ownership in commercial real estate and discuss the pros and cons of each option. Holding the title to a commercial real estate property can be managed in several ways that differ quite a bit from each other.įrom tax advantages to liability pitfalls, each type of commercial property ownership brings unique benefits and drawbacks, therefore it is important to understand each clearly before you take over a new real estate asset.