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LEGAL NOTIONS TYPES OF OWNERSHIP OF REAL ESTATE In a recent column, I wrote about types of deeds used in California and I identified the most common forms of ownership of real estate in this state. Where there is only one owner of the property, the owner holds the property as his/her sole property. Furthermore, if that sole owner is a married person or a registered domestic partner, then the property is the person's separate property (rather than community property). In California, the most common forms of ownership of realty by several persons are: (1) the joint tenancy (with right of survivorship); (2) the tenancy-in-common; (3) community property; (4) a relatively new form of ownership called "community property with right of survivorship." All four of these forms of ownership are available to married spouses or registered domestic partners who are the co-owners. In situations where the co-owners are not married spouses or registered domestic partners, neither of the two community property forms of ownership are options. Under the joint tenancy form of interest, all owners (called "joint tenants") own equal shares of the realty. When a joint tenant owner dies, the deceased joint tenant's share automatically, by operation of law, vests in the surviving joint tenant(s). The survivorship feature is the hallmark of the joint tenancy form of ownership. When, due to death, the property vests in the last remaining joint tenant, the joint tenancy character of the property is extinguished. Although ownership automatically vests in the surviving joint tenant(s), it is still necessary to submit certain documents to the recorder and assessor of the county in which the real estate is located to put the public and the county on notice when a joint tenant has passed away. When there is a tenancy-in-common in existence, the co-owners (sometimes called "tenants-in-common") may own unequal shares. Furthermore, there is no survivorship feature and so the tenant-in-common's interest will pass as directed by the tenant-in-common's will or trust (if the interest is held in trust), or if there is no will or trust, the interest will pass under the applicable laws of inheritance. Community property is marital property whereby the property is owned by husband and wife or by domestic partners whose domestic partnership is registered with the California Secretary of State. Notably, in my experience, with little exception, most spouses and registered domestic partners with wills or trusts leave their community property interests to the surviving spouse or domestic partner. However, a spouse or registered domestic partner is free to gift his/her portion of the community property to anyone by will or trust. If no such gift is made to any third party then the surviving spouse or surviving registered domestic partner is entitled to the deceased person's share of the community property. Community property with right of survivorship is property owned by the marital community of husband and wife or registered domestic partners. When the first spouse or domestic partner dies, his/her portion of the community property automatically, by operation of law, vests in the survivor. Interestingly, before this form of ownership was statutorily created by the California Legislature, the California Courts, in a number of cases, held that property could not be both community property and joint tenancy property at the same time because the two forms of ownership were at odds with one another. Obviously, community property with right of survivorship is a logical hybrid of community property and joint tenancy property for married couples and registered domestic partners. In order to create each of these types of co-ownership, specific legal terms of art must be successfully used in the deeds creating the interests. Sometimes lawyers refer to the legal terminology as "magic words." Determining which form of ownership may be best for someone is too complex of a topic to summarize in one column. In addition, there are other less common forms or arrangements of ownership of real estate for co-owners (such as partnerships). A competent attorney should be consulted about these legal options. << back to columns >> The information provided in this column is not intended to be legal advice but merely conveys general information related to the topic. © 2005-2007 Scott J. Preble, A Prof. Law Corp., Antioch, (925) 756-7111. www.PrebleLawFirm.com.
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