Taking Property Ownership Correctly For Unmarried Property Owners

Dated: 01/18/2018

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Investing in property with friend and relatives and other investors can be fun and profitable.  This can also be a legal situation that can turn into an expensive situation later on.  

I feel the need to go over this now, hopefully preventing others from making costly mistakes before they happen.  Oftentimes, this can be fixed in advance if done properly.  

As a Realtor, I have had to help many people clean up the mess after the fact and it's a lengthy and expensive process.  However, this can be prevented!  

First of all, what I am about to share with you does not apply to married couples.  When a married couple buys a property, they are automatically joint tenants.  Should either one of the couple pass away, the remaining spouse gets the home, automatically.  They have the right of survivorship.  The remaining spouse can then decide what to do with the property when they are ready.

Problems can arise when the some or all of the owners are not married and one or more of the owners dies.  How they take title to the property is incredibly important.  If it's not deeded correctly,  this situation is fixable BEFORE an owner dies. Let's discuss the types of ownership first.

Joint Tenancy(1)

A joint tenancy with right of survivorship has the characteristic of survivability.  If one party dies, the other owns the property immediately, and the property does not become part of the decedents estate.  

Tenancy in common(2)

Tenancy in Common has the characteristic of inheritability.  If one owner dies, that share is distributed according to the will, or, if no will exists, according to state laws.  

Probate laws have been established to take control of an estate, paying off all rightful debts of the decedent before the estate is distributed to the heirs.  


When buying a property with other individuals, it's possible to change the tenancy in common prior to one of the owners dying.  The deed can can be changed to tenants with right of survivorship.  This should be done by an attorney.  The cost is relatively low (Approximately $300).  Otherwise, when one of the owner dies, the property must go through probate and and costs can run $2500 to $5000.  

If there are multiple owners to a property, then it's advisable to speak to an attorney first before buying the property, so that should one of the owners die, the other owners are clear on what needs to be done with the property.  All owners must understand that if one of the owners dies, the decedent's share must go through probate unless this is addressed in advance.  This can be done via a will as well.

Most Realtors don't address these issues when writing contracts and it can become a major issue in the future.  Knowing what you may be up against in advance and/or making sure the contract is written correctly can help save major headaches later on.   Be sure to work with a knowledgeable Realtor and Attorney to iron things out before an owner of a property passes away.  At the very least, have a will prepared to handle the estate.  The worst thing you can do is not have a will professionally prepared.

So which type of tenancy should you choose?  First, get clearly on who you want your portion of the investment proceeds to go to.  Make sure the other investors aware of it.  Then contact an attorney for the best advice.  As Realtors, we cannot practice the law.  We can explain it and make suggestions as to what to check on based on your responses. However, it is imperative that you seek the advice of an attorney, who can practice law.  An ounce of prevention is worth a pound of cure. 



(1) & (2) Info taken from Florida Real Estate Broker's Guide, Fourth Edition, Dearborn Distribution, Pages 260-261

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