Real Estate

I Just Bought A Home. How Should I Hold Title To This Property?

(Stock photo courtesy of Seward Group)

Alexandria, VA – Hello, Fellow Alexandrians! We have almost survived winter, and spring is on the Horizon.

This month’s Real Estate Discussion is important, and we brought in our favorite Title Attorney to help you determine what type of title ownership makes the most sense for your new purchase.

Let’s ask the Expert!

Please meet Ryan Stuart, Lead Attorney with MBH Settlement Group in Old Town Alexandria. The following are his professional thoughts based on his decades of Title experience.

When purchasing your new home or investment property, it’s essential to understand that the manner of taking title may have significant consequences when the owner(s) passes away or decides to sell. Consider this decision carefully and speak with a qualified real estate professional or real estate attorney to ensure that this simple election doesn’t create unforeseen problems.

Purchasing a property individually

While the tenancy decision isn’t relevant to an individual homeowner, estate considerations should always be examined. When the homeowner passes away, real property owned individually will be part of the deceased’s estate.

It’s important to work with an estate attorney to prepare a Last Will and Testament. This document will allow the individual, or Testator, to dictate how and to whom all property will be devised. Without a will, all states have intestacy statutes that provide a framework for the division of property.

While most people assume that property will automatically pass to a spouse, this gets much more complicated for individuals with children from a previous marriage or those with no spouse or children. Avoid this concern. Take the time to have a will prepared.

Purchasing a property with others

When more than one individual purchases real property, the tenancy election becomes important. Tenancy refers to how multiple property owners hold legal title to property together. The type of tenancy is defined within the deed to the property.

In Virginia, there are three types of tenancy. It’s important to understand the elements of each.

Tenancy by the Entirety

Tenancy by the Entirety is a manner of holding title to real property reserved for a married couple. Tenants by the Entirety hold the property together. If one of the spouses dies, the property automatically vests entirely with the surviving spouse. The property does not become part of the estate of the deceased and it is not subject to probate. If the surviving spouse chooses to sell the property later, only a death certificate is necessary to resolve the title concern.

An additional benefit reserved for spouses holding title as Tenants by the Entirety is that the property is not subject to individual judgment claims. Typically, a judgment filed against a property owner is recorded in the land records. When that owner looks to sell or refinance the property, the judgment must be released or satisfied (paid off) to proceed with the transaction. Except for federal tax liens, judgments against one Tenant by the Entirety will not “attach” to the property and will not impact the sale or refinancing.

Joint Tenants with right of survivorship

A Joint Tenancy with right of survivorship is afforded to two or more individuals who are not spouses. This arrangement is common among unmarried couples and/or family members purchasing a home together. Joint Tenants own the property together, and together they own the property as a whole.

As the name suggests, if one of the Joint Tenants dies, their interest in the property immediately passes to the surviving Joint Tenant(s). Similar to the Tenancy by the Entirety, there is no need for the property to go through probate, and only a death certificate is needed to sell. Unlike the Tenancy by the Entirety, the property is not insulated against individual judgment creditors.


Tenancy in Common

The third type of tenancy is a Tenancy in Common. Unlike the previous tenancies, Tenants in Common each own an undivided percentage interest in the property. When multiple owners are buying property, it’s not unusual for them to contribute unequal amounts to the purchase. The Tenancy in Common allows the owners to define their percentage of ownership in the property.

Unlike the other two types of joint ownership, with a Tenancy in Common, there is no right of survivorship. If a Tenant in Common passes away, the deceased owner’s interest in the property will pass to their estate. For surviving property owners to sell or refinance, the estate must be probated. This involves an appointment with the probate clerk to record the will (if applicable), a death certificate, and a list of heirs. Again, if this becomes relevant, it’s always prudent to consult an estate attorney.

This examination of tenancy is just a brief glimpse into many of the considerations facing owners of real property. An in-depth discussion also examines revocable and living trusts, shared equity agreements, testamentary trusts, and other estate considerations. Be sure to consult with a real estate professional and an attorney if you have further questions, and we look forward to seeing you at the settlement table.

Ryan Stuart can be reached at [email protected] (703) 739-0100. The Seward Group cannot recommend him and the other attorneys at MBH Old Town enough. They take amazing care of our clients and their contracts.

The Seward Group would be honored to help you, a family member, or a friend with any real estate needs.

(Photo: Seward Group)

Article written by The Seward Group at TTR Sotheby’s International Realty with major contribution from Ryan Stuart, Lead Attorney, MBH Settlement Group Old Town Alexandria. The Seward Group offers full-spectrum concierge real estate service at all price points. Email: [email protected], Visit, or Call (703) 298-0562

ICYMI: Happy New Year in Real Estate, Alexandrians!

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