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What are the different forms of property ownership in California?

Updated on August 2, 2016

The forms of property ownership vary state by state. In California, property can be owned by one person, by several people, or by another entity such as a corporation, trust, or limited liability company.

If a person owns property in his or her individual capacity, the person is solely responsible for paying taxes, any mortgage on the property, and for the upkeep of the property or any other expenses related to the property. If he or she wants to sell the property, that can be done with only the sole owner’s signature on the deed or other documents.

In California, there are four ways in which to own property jointly with other individuals. They are tenancy in common, joint tenancy, community property or partnership interests. Under each form of ownership, two or more people own the property, but their legal rights are dependent on which type of ownership is involved.

A tenancy in common exists when two or more people are owners of undivided interests in real property. If a deed lists multiple owners, and it’s not specified that the owners own the property another way, the owners own the property as tenants in common. In a tenancy in common, each owner has the right to possess the property, and none of the owners can exclude the other owners or claim a certain portion of the property. If a tenant in common receives rent from the property, he or she must share it with the other tenants in common. Also, any expenses of the property, such as property taxes, must be shared among the tenants in common in proportion to their ownership interests. By law, a tenant in common can sell, give away, or mortgage his or her interest in the property without getting the permission of the other co-owners. When a tenant in common dies, his or her share of the property passes through the individual’s estate.

A joint tenancy exists if there are two or more people who are joint and equal owners of the same undivided interest in real estate. The most important factor involved in a joint tenancy is the right of survivorship – when one of the co-owners in a joint tenancy passes away, the property passes automatically to the surviving owners. Therefore, any property subject to a joint tenancy cannot pass under a will and is not part of the estate. Normally, for a joint tenancy to exist, the deed must specify that it is a joint tenancy, and there are other factors that must be met as well.

California is a community property state, so another way two people can own property is through community property ownership. Community property consists of all property acquired by both spouses or by either spouse during a marriage, except for any separate property acquired through gift or inheritance. Each spouse has the right to manage and control community property in general. Neither spouse can give away community property without the consent of the other. Each spouse does have the right to dispose of his or her half of community property by a will, and if no will is done the property passes to the surviving spouse.

The final form of joint ownership is a tenancy in partnership. This exists if there are two or more partners who own property for partnership purposes. There are specific rules that govern property ownership by individuals who are in a partnership.

Real estate attorneys often get asked if it’s a good idea to put a piece of property into a form of joint ownership with another party. This is often asked by elderly parents who want to put their children as joint owners on their primary home, so that the home does not go through the probate process. There are a lot of factors to consider when considering putting another party as co-owners on a piece of property, such as: What happens if one of the owners gets mad at you, gets a divorce or files for bankruptcy? Will that affect your property taxes? What if you change your mind later? How will that affect your estate plan? Will it affect your eligibility for Medicaid in the event you needed nursing home care? Will adding another party be considered a gift for gift tax purposes?

There are many factors to consider when deciding on how your property shall be titled. The best thing to do is to contact an experienced real estate attorney. If you are in the Oakland or Walnut Creek area, call Robert I. Levy, at 510-465-0025. I can help with your real estate issue. Call today to learn more.


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