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Comparison of Three Different Methods For Holding Title to Real Property

Published on: October 3, 2022

Community Property Joint Tenancy Tenants in Common

Parties Only husband and wife Any Number of persons (can be husband and wife) Any number of persons (can be husband and wife)

Conveyance – Both co-owners must join in the conveyance of real property. Separate interests cannot be conveyed Conveyance by one co-owner without the others breaking the joint tenancy. Each co-owner’s interest may be exchanged or sold separately by each owner.

Creditors’ Rights – Co-owner’s interest cannot be seized and sold separately. The whole property may be sold to satisfy the debts of either husband or wife, depending on the debt. Co-owner’s interest may be sold on execution sale to satisfy creditors. Joint tenancy is broken, and creditor becomes tenants in common. Co-owner’s interest may be sold on execution sale to satisfy the creditor. Creditor becomes tenants in common.

Death – On the co-owner’s death, ½ goes to survivor in severalty. Up to ½ goes by will or succession to others. On the co-owner’s death, the interest ends and cannot be willed. Survivor(s) own(s) the property by survivorship. On the co-owner’s death, the interest passes by will to the devisee or heirs. No survivorship rights.

Division – Ownership interests are equal. Ownership interests cannot be divided without breaking the joint tenancy. Ownership can be divided into any number of interests, equal or unequal.

Title – The title is in the “community” (Similar to the title being in a partnership.) There is only one title to the whole property. Each co-owner has a separate legal title to their undivided interest which can be exchanged or sold.

In any transaction, whether it’s a sale or a 1031 tax-deferred exchange, it is important to understand the differences among the various ways of holding title to real estate. The above chart provides a quick overview of some common ways of holding a title. Not all of these methods are available in every state and there are other methods that may be available. It is important to consult with your legal and/or tax advisors to discuss the advantages and disadvantages of these methods with respect to your specific real estate transaction.


Authored By:

1031 Investment Advisor

Nate oversees the daily operations, business development, and strategy for 1031 Exchange Place. He became interested in real estate from a young age due to his father's influence. After earning his real estate license at 18, Nate worked in the 1031 industry, focusing on business development through a unique white-labeling model. Following a religious mission in Taiwan, he continued in the industry until the 2008/2009 real estate crash. During the downturn, Nate pursued entrepreneurship and marketing, working with startups and outdoor companies. As the 1031 market recovered, he returned to work with his father, aiming to provide a more personalized experience for clients. Nate is passionate about outdoor activities and spends his free time with his wife and four sons, enjoying fly fishing, skiing, backpacking, rock climbing, and riding dirt bikes.