In California, there are several ways to hold title to real property. Property can be owned by individuals as sole owner or as co-owners. Legal entities can also hold title to real property. If you have any questions as to which method is best, you should consult an attorney.
Joint Tenancy : California Civil Code defines joint tenancy as a joint interest owned by two or more persons in equal shares. The joint tenancy can be created by a transfer that expressly declares the interest to be joint tenancy. The primary benefit of joint tenancy is the right of survivorship. Title to the real estate will transfer to the surviving joint tenant upon the death of a joint tenant without the need to go through probate.
Tenants-in-Common: When title is held as tenants-in-common, individuals or entities own an identified and specific percentage interest in a certain real property. Each tenant-in-common owner can hold a different percentage ownership in the real property. With tenants-in-common, there is no right of survivorship, and a tenant-in-common interest will not bypass probate.
These are just some of the more common ways to acquire, hold and dispose of real estate in California. It is provided for informational purposes only and should not be relied upon for legal, financial or tax advice. Since there are significant legal and tax implications depending on how you choose to hold title to your real property, you should consult with an attorney before deciding on how you will hold title to California real estate.
To learn about the different types of transfer deeds available in California, click here.
A Grant Deed transfers title ownership of real property from the current owner to the new owner. A deed can also relinquish a co-owner’s interest in real property to another existing co-owner. When a person or entity purchases real property, a Grant Deed is recorded showing them as the new owner of the property.
On the other hand, a Deed of Trust reflects loans against real property. In this regard, rather than addressing “title” to the property, a Deed of Trust addresses lien hold interests in real property. A Deed of Trust is recorded to secure repayment of a debt between a bank lien holder (lender) and the actual titleholder/owner of the property. The recorded deed of trust has priority over other recorded deeds of trust on the same property based on when they were recorded. For example, a deed of trust recorded January 1, 2017 would have priority over a later deed of trust recorded March 3, 2017. When a bank loans money to a buyer money to buy a home, the homeowner signs a deed of trust. This Deed of Trust is then recorded on the property to memorialize the loan and secure the loan.