Types Of Property Ownership

When a foreign investor makes a decision to purchase real estate in Florida, the next thing to resolve is exactly how this foreign investor will hold title to the property he intends to acquire. Unlike many other foreign countries, the United States allows foreign citizens to hold title to real estate in fee simple (personally and absolutely regardless of any immigration status and without the need for assistance from a U.S. trustee or company). There is a variety of methods of ownership for real property.
Sole Proprietorship in Fee Simple is the simplest form of ownership. The Buyer purchases the real property in his own individual name. When sole proprietorship in fee simple is selected as a method of ownership, the attorney or title company carrying out the closing will usually require the Buyer to disclose his marital status. The marriage status of the owner becomes crucial when he or she will in turn sell or mortgage the property to a third party.
The main advantage of sole proprietorship in fee simple is that it can be easily transfered without the necessity to produce the signatures of other parties (except for the spouse in case of homestead) or any other sort of trust or corporate formalities.
Co-tenancies are created when two or more individuals or entities share ownership of real property as a whole. There are three basic forms of co-tenancies.
Tenancy in common is a common form of co-tenancy. The most common way of creating a tenancy in common is by conveyance or transfer to two or more persons. It may arise by a deed or conveyance of an undivided tract of land to two or more persons, in which case the new owners are tenants in common until the tract is divided by agreement or otherwise.
Joint Tenancy with Right of Survivorship
An estate in joint tenancy can only be created through a Deed or a Will. In order to create a joint tenancy with right of survivorship, there must be unity of possession, interest, title and time. In Florida, the right of survivorship must be expressly provided for in the Deed or Will. Unity of possession, interest, title and time means that all joint tenants of a property must have acquired equal rights and an equal interest in the property at the same time.
An estate by the entirety is basically a joint tenancy by husband and wife. As tenants by the entirety, husband and wife own and control the whole estate as if one person under the law. The estate by the entirety also features the right of survivorship.
Real Properly Ownership Through A Corporate Entity
Foreign investors may be advised by their attorney to purchase real estate in the name of a domestic or foreign corporation (or as tenants by the entirety). Owning real estate through a corporate or similar business entity has numerous advantages. But there is also the other side of the coin, like annual fees, additional accounting requirements, and others.
Some estate planners recommend the use of a trust or “Florida Land Trust” under certain circumstances. Most trusts provide the right to hold, manage and convey the property to one or more trustees who must perform their duties in the best interest and for benefit of the beneficiaries of the trust.