Homebuyers aspire to homeownership because it makes financial sense, offers stability and provides more freedom to make housing choices. Your real estate ownership interest describes your legal rights to a specific property. The type of title deed used to grant the ownership interest and the ownership interest itself may limit your ownership and rights to use the property. .
Fee Simple Absolute Ownership
The most common type of ownership interest in residential real estate is called "fee simple absolute," or "fee simple" for short. It means you have absolute ownership subject only to government and deed restrictions. Under fee simple ownership, the home is still subject to property taxes, and possibly utility easements, homeowners association rules and similar government and neighborhood restrictions.
Fee simple ownership gives owners the sole right to transfer the property, it allows an owner's heirs to obtain ownership upon the owner's death and in the absence of a will, and the ownership interest continues until the owner dies without heirs.
Fee Simple Ownership Split
A fee simple ownership interest may be held by one or more individuals. When there are multiple owners listed on a title deed, they all maintain the outright ownership privileges of fee simple. Each has the right to sell or transfer their interest in the home, give it to their heirs or make modifications to the property itself. When two or more people enter into joint ownership, it is known as a joint estate. There are several ways to hold joint ownership interests.
Holding Joint Tenancy
If you hold title as a joint tenant, four conditions must be met. You must take title with the other owner at the same time; each of you must be on the same title deed; each of you gets an equal share of ownership interest; and each has the same right to possess the property. In a joint tenancy, if one owner dies, the dead owner's share goes to the surviving owner. Married couples often take title to the marital home as joint tenants.
Tenancy by the Entirety
Tenancy by the entirety is a type of joint ownership that allows spouses to own property as a single entity, with the right of survivorship. Although a joint tenancy may be created by non-married individuals, only married couples can hold title as a tenancy by the entirety. A tenant by the entirety can't transfer his ownership interest without the spouse's permission.
Tenancy in Common
An unlimited number of owners can title under tenancy in common. All owners share ownership of the real estate and share a right to possess it. Upon an owner's death, the deceased owner's interest in the property passes onto heirs rather than the surviving owners. Multi-family property investors often use this form of ownership to ensure their investment passes onto heirs or those stated in their will after death. Owners under this arrangement can hold equal or unequal shares of the property.