Common Forms of Property Ownership in Florida
In reviewing or establishing title to real estate, it is helpful to understand the various options for property ownership in Florida. If you are purchasing a residential or commercial property with someone else, such as a spouse or business partner, you need to make sure that the form of ownership you select is reflected in your title documents, notably your deed. Likewise, you need to ensure the seller holds proper title and that there are no co-owners or other individuals with separate rights or claims that need to be considered.
Fee Simple and Leasehold Ownership
When an individual owns a piece of real estate outright, they are said to hold title “in fee simple.” Fee simple tenure is considered indefinite, in contrast to a leasehold estate, where the owner has the right to use the property for a specified period of time. Leasehold ownership is also sometimes referred to as a “tenancy for years,” and it generally lasts for an extended period of time (e.g., 99 years) rather than the type of month-to-month leases used to rent an apartment or a condo. From a title standpoint, fee simple ownership is the simplest to deal with since it means the owners have the right to sell or dispose of the property as they please, whereas the leasehold rights may contain several restrictions.
Joint Owners and Tenants in Common
Things get more complicated when two or more owners hold or take title to a single piece of real property. In fact, there are several different kinds of multi-party ownership. The two main types are tenants in common and joint tenants.
If the co-owners are tenants in common, each owner retains separate rights over their share of the property. For example, let's say two people buy a commercial building together. The deed specifies that they are tenants in common, with Person A owning sixty percent (60%) and Person B owning forty percent (40%). Person A could later sell or devise her sixty percent interest without the consent of Person B. However, the sale would not affect Person B's ownership of his share.
By contrast, if the co-owners were joint tenants, then each owner has equal rights over the entire property. In other words, Person A could not sell a share of the property without Person B's consent. And in the normal course of events, if either co-owner dies, the survivor automatically takes full possession of the property. For this reason, the co-owners in a joint tenancy are often referred to in legal papers as “joint tenants with right of survivorship.”
You may also come across a reference to “tenants by the entireties.” This is basically a joint tenancy for married couples. Spouses hold property equally as tenants by the entireties. Upon the death of one spouse, the other becomes sole owner.
If for some reason the deed to a property does not specify the form of co-ownership, under Florida law it defaults to a tenancy in common.
Seek Advice from a Florida Real Estate Attorney
It is also possible to own (or co-own) property in a trust, or through a business entity, such as a corporation, limited liability company, or a general or limited partnership. This can present its own set of challenges and legal issues. Whatever form of ownership you wish to adopt, it is always a good idea to work with a qualified St. Petersburg Real Estate Attorney who understands the law in this area. Contact Kira Doyle Law today at 727-537-6818 to let us know how we can help you with your real estate needs.