Forms of Ownership

1. Exclusive Property (Tenancy in Severalty – sunshine ownership of a freehold estate; passes to heirs)
   • This is the simplest form of ownership, where one person has sole ownership of a property free of liens.
   • Upon the owner's death, property generally passes to his or her heirs under his or her will or state law.
2. Tenancy in Common (Tenancy in common | co-tenants individually own undivided interests – any ownership share possible – no survivorship – can convey to outside parties)
   • In this form, several co-tenants individually own undivided interests in the property.
   • Each owner can own any part of the property, and there is no survivorship.
   • Owners can transfer their interests to third parties without the consent of the other co-tenants.
3.  Joint Tenancy (Joint Tenancy) | equal undivided interest jointly owned – survivorship (may require express provision) – requires four units to create: time, title, interest, possession
   • Joint tenancy involves joint tenants who have equal undivided interests in the property.
   • A key feature is the survival, meaning that when a joint tenant dies, his or her interest automatically passes to the surviving joint tenants.
   • To create a joint tenancy, all four units (time, title, interest, possession) must be present.
4. Tenure by Whole or Tenure by the Whole (Tenancy by the entireties – husband and wife own equal undivided interest – Now applies to same-sex couples in some states) 
   • This form of ownership is usually reserved for married couples, where both spouses have equal undivided interests in the property.
   • Importantly, tenancy by the entirety now applies to same-sex couples in some states.
5. Community Property (Community property | joint ownership ownership by spouses as opposed to separate property)
   • In community property cases, spouses jointly own property acquired during the marriage, as opposed to separate property, which includes assets acquired before the marriage or through gifts or inheritances.
   • Income derived from separate property may also be considered separate.
   • Separate Community
   • • acquired before marriage                                               • all other property earned or acquired during the marriage
     • acquired by gift or inheritance
     • acquired with separate-property funds
     • income derived from separate property

Joint Tenancy and the Four Units (Joint Tenancy & Four Units)

Unity of ownership: owners hold single title jointly

Equal ownership: owners always hold equal shares

Transfer: may transfer to new owner as a tenancy in common interest with remaining joint tenants

Survivorship: on death, interests and rights pass to other joint tenants

Creation: requires “four units,” PITT.

To create a joint tenancy, all four units, often referred to by the acronym PITT, must be present:

1. Possession (Qossession): All joint tenants acquire the same possession rights | acquire same possessory rights
2. Interest (Yointerest): Joint tenants acquire equal and undivided interests | acquire equal, undivided interests
3. Time (Time): Joint tenants acquire their interests at the same time | acquire interests at the same time
4. Qualification (Title): Joint tenants acquire their interests under the same title | acquire interests with same debt

Trust Property (Estates in Trust)

Trusts offer another avenue for property ownership. In a trust arrangement:

• The trustor (trustor – property owner) transfers title, deed, and a trust agreement to the trustee. Trustor gives title, deed, trust agreement to trustee
• The trustee (trustee) holds the legal title and fulfills fiduciary duties towards both the settlor and the beneficiary. Trustee renders fiduciary duties to trustor and beneficiary
• The beneficiary (beneficiary) receives the benefits of the property. Beneficiary receives ownership benefits
• Trusts can be living – living trust (created during one's lifetime) or testamentary – testamentary trust (established through a will). Living/testamentary trust – conveyance of real, personal property during one's lifetime
• Land trusts (land trust) are a unique way in which the grantor (grantor) and the beneficiary (beneficiary) are the same part; The beneficiary uses and controls the property but does not appear in public records. land trust – grantor and beneficiary are same party; beneficiary uses, controls property but does not appear on public records

Condominiums

Condominium ownership combines private ownership of a unit of airspace with an undivided interest in common elements as a co-owner with other owners. (Ownership of a unit of airspace plus an undivided interest in the common elements as tenant in common with other owners)

• Owners can buy, sell, encumber and foreclose on their units without affecting other unit owners. (May be sold, encumbered or foreclosed without affecting other unit owners)
• Condominiums are usually created by a declaration from the developer (creation: by developer's declaration), are taxed individually (individually taxed)
• and are managed by a condominium association (managed by condo association).
• The owners share the expenses of common areas (owners share common area expenses).

Cooperatives

Cooperatives involve ownership of shares in a corporation and a self-tenancy in a unit:

Ownership of
– shares in ownership corporation
– proprietary lease in a unit

• The corporation owns the property solely and undivided (corporation has sole, undivided ownership).
• Owners can potentially be responsible for the expenses of the entire cooperative; Creditors can foreclose on the entire property (owners potentially liable for expenses of entire co-op; creditors may foreclose on entire property).

Time Shares

Timeshares offer a rental or ownership interest in a property for periodic use on a scheduled term basis (lease or ownership interest in property for periodic use on a scheduled basis):

• The timeshares of lease They imply that the tenant rents the property according to the lease term (lease: tenant leases property per the lease's schedule).
• Timeshares in property they mean that the tenants in common own undivided interests and share expenses under a separate agreement (freehold: tenants in common own undivided interests, pay expenses per separate agreement).

In conclusion, understanding the various forms of property ownership is essential for anyone involved in real estate. Each way has different characteristics and implications, so it is essential to choose the one that fits your needs and objectives when acquiring or managing property.