(Jim) Kerrie, we have a question here that asks what are the different ways that people can hold title to land?

(Kerrie) The most basic way is to take title in one person’s name. That person has all of the rights that a property owner may have.

(Jim) But there’s a catch in Ohio.

(Kerrie) Yes, if that person is married or gets married after taking title, that person’s spouse has a dower right. This means that the spouse must sign any deed or mortgage even though the spouse is not in title to the property.

(Jim) We could spend the entire column on dower. What are other common ways to take title?

(Kerrie) Whenever more than one person takes title to property, the legal presumption is that they take title as tenants in common. Unless the deed specifies otherwise, the parties take title in equal shares. For example, if a deed is to two parties, they each take an undivided one-half interest; to three parties, it would be undivided one-third interests.

(Jim) What does undivided interest mean?

(Kerrie) It means that the party takes title to the whole property, but that the party’s “share” is a fractional interest. This means that the parties must share the costs of the maintenance of the property and share in the profits in proportion to their ownership interest.

(Jim) How would this come up?

(Kerrie) If, for example, five people inherited some property and one of the owners paid the taxes, that owner is entitled to contribution from the others.

(Jim) Is there anything else unique to tenants in common?

(Kerrie) Yes, if someone is a tenant in common and dies, their interest passes to their devisees under their will, or by the statute of descent and distribution, if they have no will. This means that a probate estate must be opened to transfer this person’s ownership in the property.

(Jim) Is there a way to take title if someone wanted to avoid probate?

(Kerrie) The most common method has been to take title in a survivorship tenancy. The shares are the same as tenants in common, but upon the death of a survivorship tenant, the share passes to the other survivorship tenant or tenants automatically and is not covered by the deceased will or the statute of descent and distribution. For most married couples, this is the most common way to hold title. If one spouse dies, the other is in title to the entire property without having to go through the probate process.

(Jim) Can non-married parties use a survivorship tenancy?

(Kerrie) Sure, but there could be some problems. For example, a widow wants to avoid probate, so she deeds the property to herself and her son in survivorship. When she dies, the son takes title. This is not necessarily a problem, unless there are other siblings who thought that they should also get a share. The son takes title by himself and not subject to claims by the others. But of course it could end up in contentious litigation.

It could also be a problem for the widow while she is alive. Her son is in title and must sign and deed or mortgage, and his wife must release dower, if he is married. This could be a problem. If the son is in title, the widow may not be eligible for homestead exemption, which could lower her taxes.

(Jim) Is there any way to avoid probate and some of the problems with survivorship?

(Kerrie) Yes, in Ohio we have a fairly new form of deed called “transfer on death” deed. By using this form of deed, the widow could transfer the property to herself, naming her son as transfer on death beneficiary. The title to the property stays in the widow’s name and her son takes no present interest. She does not need him to sign mortgages or deeds. If she dies, then the son takes title. If the son predeceases her, then the widow’s property goes through her will or the statute of descent and distribution.

(Jim) All of this sounds pretty complicated. There are a lot of choices with a lot of consequences.

(Kerrie) As always, a lawyer can help with those choices.

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Jim and Kerrie Matre are married partners in the law firm of Matre & Matre Co., LPA. The firm generally limits its representation and practice to all legal issues related to real estate, construction law and corporate representation.

This article is written to introduce the reader to common real estate legal concepts. It is not intended to be legal advice to any specific party. As always, consult your attorney regarding your specific situation.

Have questions? Email them at either kmatre@matrelaw.com or jmatre@matrelaw.com