Skip to main content
Find a Lawyer
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Types of Homeownership

Types of home ownership: House keys with signed settlement document and pen

Buyers should understand the types of real estate ownership when buying a home or starting estate planning. The type of ownership you select will impact your rights throughout your homeownership and beyond.

Do you want sole ownership, or are you open to co-ownership? Do you want an undivided interest in the real property?

This article will explore the different types of property ownership, including fee simple, joint tenancies, and more.

Fee Simple

Fee simple absolute is the most common form of homeownership. This type of ownership has the following features:

  • The holder of a title in fee simple has full possessory rights now and in the future for an infinite duration.
  • There are no limitations on its inheritability.
  • The titleholder can sell the entire property or any portion of the property.
  • The owner can dispose of the property by will when they die.

For example, in a condominium or townhouse sale, the owner often buys the residential unit for a fee simple. They then have the right to use community property. Each unit has its own tax bill, deed, mortgage, and ownership rights but shares in the maintenance of the common areas. Most states have a "Condominium Deed," which will reference the separate maintenance agreement.

Joint Tenancy With Right of Survivorship

In a joint tenancy with right of survivorship (JTWROS), each owner holds an undivided share of the estate. There is a right of survivorship, which means when one joint owner dies, the surviving owner or owners have an undivided right to the entire estate. This ownership is not subject to the rights of the deceased co-owner's heirs, avoiding probate.

Tenancy in Common

tenancy in common is another type of joint ownership. Each owner has an undivided interest in the entire property. Each tenant has an equal right of possession. There are no survivorship rights. Each tenant has a distinct proportionate ownership interest, which passes by succession. If a deed does not state "with right of survivorship," the presumption favors tenants in common.

Tenancy in the Entirety

Tenancy in the entirety is a marital estate, only created between married couples. It is similar to a joint tenancy, except that the right of survivorship cannot be destroyed since severance by a surviving spouse is not possible. If one of the spouses dies, the property automatically passes to the surviving spouse.

In many states, there is a presumption that any transfer to a husband and wife creates a tenancy in the entirety. Many states have abolished this type of tenancy. Instead, they favor the couple taking title to the property as joint tenants with the right of survivorship.

Community Property

In states with community property laws, property acquired during a marriage belongs to both spouses equally. Community property is not limited to the real estate the couple purchases. It includes personal property, such as art and jewelry. If the couple divorces without a prenuptial or postnuptial agreement, they get an equal share of community property.

The following community property states use community property laws to distribute assets following a divorce:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

Alternate Methods of Homeownership

The types of ownership and co-ownership mentioned above are not the only ways to own property. For example, real estate investors could form an entity or a trust to own property. A living trust is another way to own property and avoid probate when the grantor dies.

Living Trust

living trust requires a grantor (owner of the property), the property, a trustee, and a beneficiary. The grantor transfers the property into the trust for the beneficiary. The trustee then manages the trust for the beneficiary. There are two types of living trusts: a revocable living trust and an irrevocable living trust.

In a revocable living trust, the grantor maintains some control over the trust. Often the grantor is the trustee. By contrast, in an irrevocable living trust, the grantor relinquishes control over the trust.

Business Partnerships

Most of the examples in this article refer to people as owners or co-owners of real estate. Business partnerships can also own real estate. Real estate investors are one example of a business partnership that owns real estate. Often the partners structure their business to avoid personal liability.

One popular business structure is the limited liability company (LLC). An LLC has a general partner and limited partners. The limited partners buy shares of the LLC but leave its management to the general partner. The shareholder's liability is never more than the value of their share. The LLC shields their personal assets. So if a bank places a lien on a home the LLC owns, the bank can't go after any of the limited partners.

Get Help

Buying a home is a big undertaking with many challenging decisions. A real estate attorney can help guide you through the homebuying process and advise you of your legal rights.

Was this helpful?

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:

Next Steps

Contact a qualified real estate attorney to help guide you through the home buying process.

Begin typing to search, use arrow keys to navigate, use enter to select

Help Me Find a Do-It-Yourself Solution

Copied to clipboard

Find a Lawyer

More Options