When most people are looking into purchasing a plot of land, or any other property, the various options for land ownership probably don’t occur to them. That’s because sole ownership is the most common option for ownership.
However, there are a number of options for land ownership to consider. Some of them can simplify the land-owning process, but some have the potential to make things more complicated in the distant future.
It’s best to gain a full understanding of the various types before making the commitment toward purchasing a piece of property. We’ve made a list of the main types of property ownership to help you make the best choice for your needs.
Sole Ownership
Sole ownership is probably the most common type of property ownership. It’s also the simplest, since you’re the only person on the title. That means you’re the only person who can make decisions regarding the use or distribution of the land.
When you’re the sole owner of a piece of property, you are fully entitled to sell the property or give it away. When you pass away, you should specify in your will how you’d like the property to be passed on in order to make things simple for your loved ones.
Joint Tenancy With Rights of Survivorship
Joint tenancy is a common type of property ownership for married couples.
Although “tenancy” is a word that most people probably associate with renting, in this instance it refers to ownership.
Joint tenancy means that both parties have full rights to the use of the property– ownership is not divided between the two owners. That means that one owner can sell the property without obtaining permission from the other.
“Rights of survivorship” is a term that just means that upon one property owner’s death, the other owner gains sole ownership of the property.
Tenants By The Entirety
Joint Tenancy With Rights of Survivorship is commonly utilized by married couples, but it’s not limited to their use. Any two people can own a piece of property with Joint Tenancy With Rights of Survivorship.
Tenants By The Entirety is a type of property ownership that is exclusively reserved for married couples. Under this type of ownership, one of the owners cannot sell the property without the permission of the other owner.
Similarly to Joint Tenancy with Rights of Survivorship, a person who owns property under this type of ownership will automatically leave the property to the surviving owner upon their death.
Not all states recognize Tenants By The Entirety, but it is recognized within the state of Arkansas.
Community Property
Community Property ownership is not recognized within the state of Arkansas, and is in fact only recognized in 10 states. This type of ownership signifies that the property is owned equally between spouses, even if only one person’s name is on the title.
Owning Trust
This type of ownership is really only used for minors or adults who are disabled. The property is owned by a guarantor, and when that guarantor passes away, a new guarantor or trustee is appointed. This is a convenient way to keep property within a family without having to deal with probate when a guarantor passes away.
Tenancy in Common
Under Tenancy in Common property ownership, a single piece of property is divided between multiple owners. These owners own a percentage of the property. The property itself is not divided– each owner has the right to full use of the land– but Rights of Survivorship don’t apply here. If one owner passes away, the property will go into probate and will likely be passed onto one of the heirs named in their will, rather than the other property owners.
Which type of property ownership is right for me?
Each type of property ownership has pros and cons. It might help to seek the insight of a professional in order to determine which ownership option works best for your needs, and for your use of the property in question.
For help determining which type you should seek out when purchasing property, you should contact a legal professional or an experienced real estate agent. To discuss property ownership options with one of the experts from Edge Realty, drop us a line today!