(Kerrie) We have some questions from a real state agent. She asks: “What are the different ways that people can hold title to land and what is the difference between the title and the deed? Are the title and the deed the same thing?”

(Jim) Title is the term that we use to describe the interest that a person has in land, their rights and obligations. We will be considering three ways of taking title – tenants in common, tenants in survivorship and transfer on death interests. The deed is the document that we use to transfer title from one owner to the next. The terms of the deed define how the grantee, that is the party receiving the interest, takes title to the real estate.

The most basic way to take title or be deeded land is in one person’s name. That person has all of the rights that a property owner may have.

(Kerrie) But there’s a catch in Ohio.

(Jim) Yes dear, if that person is married or becomes married after taking title as a single person, that person’s spouse has a dower right. Dower is a recognized statutory right that arises solely out of marriage. It comes to us from feudal England in the Middle Ages. This right is inchoate or not effective unless certain circumstances arise. Those circumstances are: a) that one spouse conveys title without the other spouse’s knowledge or consent; and, b) that the conveying spouse dies while the marriage is still valid. These circumstances give rise to the dower interest. We could spend the entire column on dower. For our purposes here a dower right means that the spouse, even one not in title, must sign any deed or mortgage to subordinate or release the spouse’s dower right.

(Kerrie) Middle Ages, huh. Well, I guess since you were there, you should know all about it.

(Jim) Ouch. Very funny. Okay, let’s talk about two or more people taking title to property. Whenever more than one person takes title to property, the legal presumption, the “default” in modern language, is that they take title as tenants in common. Unless the deed specifies otherwise, the parties take title in equal undivided 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. An undivided interest 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. 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. In some families that could lead to a lawsuit and often does.

Another consideration in taking title this way is when a tenant in common dies. That party’s interest passes to the parties named in their will, or the interest passes to their heirs at law under the statute of descent and distribution, if they have no will. This means that when a tenant in common dies, a probate estate must be opened to transfer this person’s ownership in the property. This could be quite a problem for married couples with children where there is no will leaving everything to the surviving spouse. The children could inherit the real estate and a guardianship must be opened to convey their interest.

(Kerrie) But, if someone wanted to avoid probate, the parties could 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 controlled by the deceased’s will or the statute of descent and distribution. For most married couples, this is a very 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. And, of course, non-married parties can also use a survivorship tenancy.

(Jim) Sure, but there could be some problems. For example, a widow desires to avoid probate, so she deeds her 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.

(Kerrie) How about another suggestion to our readers who seek to avoid probate and some of the problems with survivorship?

(Jim) Glad you asked. 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. This type of ownership is very new and all of the details have not been worked out. I think that it can be very useful in estate planning, but anyone considering it should consult a lawyer before filing deeds of record.

(Kerrie) Of course, the choice of deed is really quite complex and the results from that choice can have very serious legal consequences. A lawyer should be consulted – but that’s my opinion.

(Jim) And mine.

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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