how to hold title

This is a fair question which arises when purchasing a property. In Virginia, there are multiple ways to hold title to a property. This is a brief explanation of each to provide background information. This is not a difficult question when there is only one owner. However, things get a little more complicated when more than one person is going to be on title to a property. In such cases, there are three options for holding title: (1) joint tenants, (2) tenants by the entireties, and (3) tenants in common. Please see descriptions of each below.

 When a single person is the sole owner of a property. 

Tenants by the entireties is a special form of joint tenancy that exists only for married couples and is based on the legal fiction that a married couple forms one “whole”. Both owners have an undivided interest in the whole property. The right of survivorship is created through specific language included in the deed. Upon the death of either, the survivor takes sole ownership to the exclusion of the deceased spouse’s heirs.

If a married couple holds title as tenants by the entirety, lien creditors cannot attach one spouse’s lien or judgment to the property unless the tenancy is severed by either divorce or death. In order for a judgment or lien to attach to the property it must be against both spouses. There are two exceptions to this rule: (1) any transfer of a property into a tenancy by the entirety made in contemplation of a bankruptcy can be set aside as fraudulent if it is made within one year of the bankruptcy and it was made with the intent to defraud; and (2) any federal Internal Revenue Service liens applicable to only one spouse will attach to the property.

Unlike tenants by the entirety, joint tenancies can be severed. If one joint tenant decides to convey his or her interest in the property, that interest is conveyed and the joint tenancy is destroyed (reverts to tenants in common). Lien creditors can attach one joint tenant’s interest in the property, making the entire property subject to partition. Additionally, if the joint tenants disagree over the use or disposition of the property, a partition lawsuit may be required before either owner would be able to exercise their intentions for the property.

Tenancy by the entireties is also different from a joint tenancy because, if title is held as tenants by the entirety, one owner cannot unilaterally convey his or her interest in the property and the tenancy cannot be severed except by action of both parties. Any attempts to sever the tenancy by the entirety will be rendered void. Therefore, any deed disposing of any interest in the property will need to be signed by both owners.

Holding title as joint tenants is when two or more people have an undivided interest in the whole property. The right of survivorship is created through specific language included in the deed, or the joint tenancy will be reverted into tenancy in common. With the right of survivorship, the surviving joint tenant immediately becomes the owner of the entire property upon the death of the other joint tenant.

Unlike tenants by the entirety, joint tenancies can be severed. If one joint tenant decides to convey his or her interest in the property, that interest is conveyed and the joint tenancy is destroyed (reverts to tenants in common). Lien creditors can attach one joint tenant’s interest in the property, making the entire property subject to partition. Additionally, if the joint tenants disagree over the use or disposition of the property, a partition lawsuit may be required before either owner would be able to exercise their intentions for the property.

Tenancy by the entireties is also different from a joint tenancy because, if title is held as tenants by the entirety, one owner cannot unilaterally convey his or her interest in the property and the tenancy cannot be severed except by action of both parties. Any attempts to sever the tenancy by the entirety will be rendered void. Therefore, any deed disposing of any interest in the property will need to be signed by both owners.

Tenants in common is the default form of ownership in Virginia when there are multiple owners on title to the property. This is when two or more people own an equal (or unequal undivided share in a property if stated in the deed) and each has an equal right to possess the entire property. However, tenants in common do not have the rights of survivorship that exists in a joint tenancy. When an owner dies, his or her interest will not pass to the surviving owner or owners but will pass according to the deceased owner’s will or to the deceased owner’s statutorily determined heirs (if no will).

There is no creditor or judgment protection for tenants in common. Liens and judgments against only one of the owners can attach to that owner’s portion of the property. This can eventually lead to the entire property being sold to satisfy the lien or judgment.