Deciding to hold title to a property is a major step to take. So, knowing the legal complexity of different types of titles beforehand can be very useful.
Owning a property is probably on everyone's wishlist. Whenever someone becomes affluent enough, they think about investing in property. It has been tested through time that investing in property is highly beneficial.
Once you're ready to own property, the next thing is to consider the legal aspects. You need to know about the property you wish to own and what type of ownership will suit you. You will also understand the legal procedures better if you have this knowledge.
So, here we have discussed different ownership types in Georgia, and how you can proceed to hold the title of a property.
Prerequisites for Owning Property
Before changing the title or ownership of a property, you need to ensure a few things to avoid future legal complications.
First, you need to ensure that the seller has the complete and exclusive right to sell the property. Additionally, when the seller transfers the title to you, you get the full right of the property to own and modify it.
If the above conditions are met, it can be called a "clear title," where the buyer gets the full and exclusive right of the property. Otherwise, if the property has a lien or other obligations, it can be considered a "cloud title."
A title search is not always necessary if you receive or inherit property from a trusted party, like family members. For such cases, you can have a quitclaim deed. If you are wondering what is a Quitclaim Deed in Georgia and how it works, you can contact the County Clerk Office in Georgia or an attorney.
In Georgia, an attorney will process the title transfer when you are purchasing a property.
The attorney mainly conducts the title search and manages the settlement. When they declare the title as clear, it becomes marketable. Additionally, the attorney ensures that the documents for both buyer and seller parties are prepared correctly, the payments are complete, and the signatures are authentic.
There could be some missing lien or encumbrances for the property that the public record does not mention even after the title search. You can get the necessary support from a real estate buyer if you obtain title insurance in such cases.
Different Types of Property Ownership
Once you have clearance to buy a property and want to proceed further to change the title, you need to know what type of ownership title you want for the property.
Here are some of the most common property ownership types.
As the name suggests, sole ownership means you will own the property all by yourself. The property's title will be transferred to an individual and be an addition to their asset without any estate planning benefits.
The property acquired through sole ownership cannot be obtained by the spouse or children without an affidavit, quitclaim deed, or probate.
Tenants in Common is applicable when two or more people co-own a property. Also, the owners can have different percentages of shares of the property, which needs to be stated in the deed.
Tenants in Common do not have the right of survivorship. If one co-owner dies, their heirs or others will get the ownership of their part of the property according to the will of the deceased.
The Tenants in Common title co-owners have an exclusive right to their respective parts. One co-owners lien, transferring title, and selling their part of the property will not affect the other co-owners.
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Joint Tenancy with Rights of Survivorship
Joint Tenancy with Rights of Survivorship allows co-ownership of a property where if one owner dies, the other owner becomes the full owner of the property. There is no use of probate or inheritance in such a property.
In Georgia, when family members buy property, joint tenancy with rights of survivorship ownership is the most used one. The reason being the ownership is automatically transferred to the other owner, and the property remains in the family. Married or unmarried couples, parents, siblings, and children can have this title.
Any action taken on the property has to be a joint decision for this title. Both co-owners must agree on decisions like modification of property, mortgage, debt, tax, selling, etc. Otherwise, the court will intervene to resolve disagreement issues.
Tenancy by Entirely is a title for co-ownership when the owners are legally married. In the legal regime, both the owners are considered as one in this title. When one dies, the other spouse gets the ownership entirely without any legal restrictions.
Tenancy by Entirely is not applicable in Georgia. However, it is valid in many other states. In Georgia, one co-owner does not own the entire property if their partner passes away.
To get spousal support for the surviving spouse, one can get a Petition for Year's Support. Alternatively, joint Tenancy with Rights of Survivorship can be a better title option for married couples.
A revocable living trust can own property under the title trust ownership. It can have multiple members managed by the founder or selected trustee. This ownership impacts taxes, legal liability, estate plans, etc.
In case of incapacitation of a trustee, their successor will take their place without probate. The successor has to oblige the instructions and responsibilities of the trust. If the initial trustee recovers from their incapacitation, they will again be in the previous position of a trustee.
Conclusion
Although we have discussed property ownership mainly in the context of Georgia, the procedures are similar for other states as well. There could only be a slight difference in clauses in the property ownership document. At any point, if you are unsure about them, you can ask for help from attorneys.