Types of property ownership in Florida
Prior to closing, a homebuyer who is purchasing property in Florida must consider numerous matters. One extremely important matter, which is often not given enough consideration, is determining how to "take title" to the property. In other words, many types of property ownership exist, each with unique benefits and drawbacks.
Factors such as asset protection, taxation and estate planning-needs must be considered before choosing the best way to take title to the property. Various ways in which a buyer of a Florida home may take title to property are described here.
Title to real property can be taken in a person’s own name, which is generally referred to as sole ownership. Unmarried persons, legally divorced persons and married persons who wish to hold the property in their own names may use this form of ownership.
However if a married person takes title in his or her own name, at the time he or she resells the property his or her spouse will have to relinquish his or her rights to the property due to Florida’s homestead laws.
A person can also take title to the property in the name of a living trust, which is commonly known as a revocable inter vivos trust.
If a person is purchasing the Florida property with other persons, they can take title to the property as Tenants in Common. As Tenants in Common each joint owner of the property has the right to sell, lease or bequeath their interest in the property to his or her legal heirs. In Tenancy in Common, any number of individuals can hold title to their respective share of the property, depending on their contributions.
A person purchasing the Florida property with other persons can also take title to the property as Joint Tenants with the right of survivorship. Under Joint Tenancy all joint tenants have equal possession rights to their respective share in the property. In addition, due to the right of survivorship which is not present in Tenancies in Common, when a joint tenant dies, by operation of law his or her share is automatically distributed among the remaining joint tenants. There are no restrictions on the number of persons that can be joint tenants under a Joint Tenancy.
Similar to Joint Tenancies is the Tenancy by the Entirety, which is for married couples who wish to hold a joint title in the name of both spouse. Under a Tenancy by the Entirety the property is equally held in the name of both the husband and wife. This title is applicable and available for married couples only. Both the husband and wife have equal possession rights to the property and similar to a Joint Tenancy, when one spouse dies, his or her share is automatically distributed to the surviving spouse.
Other forms of ownership
Title to Florida property may also be held in the name of a separate legal entity organized under Florida state law such as a corporation or a limited liability company. Corporations and limited liability companies can have any number of shareholders or members, respectively, but the rights to the property of individual shareholders or members will be limited to the face value of shares or membership interests held by them.
Additionally, title to the Florida property may be held in the name of a partnership of two or more persons. If the title is taken in the name of a partnership it will be held in the name of the partnership, with the partners having equal right to possession of their respective share in the property.
Finally, the title may also be held in the name of a Florida Land Trust, in which the legal title of the property is transferred to a trustee for the benefit of the named beneficiaries. Some people prefer to take title in the name of a Florida Land Trust because it offers privacy with no one knowing the beneficial owner of the property or the amount of the purchase price paid for the property.