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Passage Of Title In North Carolina

By Elizabeth R. Elstien

North Carolina has several types of certificates of title to real property, which is a recorded document that shows ownership of real estate. Ways to pass title from one person to another are based on the type of title. Real estate sales are done through deeds. Keep reading to learn how to convey title in The Old North State.

Sole Ownership

This type of title shows real estate ownership for one person. Therefore, the owner is free to transfer title in any way she/he sees fit, including gifting or sale, when alive through a signature on the instrument of transfer/deed of conveyance or after death by willing to heirs or other beneficiaries.

Tenancy In Common

Two or more owners hold title to a property together. Each owner may hold a different percentage in the property that must be stated in the deed of conveyance. Owners can will their property percentage to heirs, provided there is no "Right of Survivorship" clause (see below). A Tenancy in Common is often used in business deals with an investment property that both owners may profit on. Also used for unmarried couples that want to own a home together but who may wish to separate their property percentage from their partner, perhaps to will their percentage to children of a previous marriage or for any other reason. Each co-owner has the same basic rights as that of a sole owner but only with their percentage of the property. In case of a difference of opinion on the use or sale of the property, a lawsuit may be filed to settle matters if the co-owners cannot settle the dispute on their own in a friendly manner.

Joint Tenancy with or without Right of Survivor

A second way for two or more people to take title to a property, most commonly used for married couples. In a right of survivorship tenancy, if a joint tenant dies, the remaining joint tenant(s) automatically acquires their interest. Interest is divided equally among all tenants. Rights and obligations generally are the same as for Tenants in Common, but property interest cannot be willed to any party. "Right of Survivorship" must be specifically spelled out in the deed of conveyance. If not on the deed, there is just a joint tenancy with no right of survivorship of the deceased's property share.

Tenancy By Entirety

Tenancy by entirety is similar to a joint tenancy but is used only for husband and wife. Each spouse owns entire interest in the property, but neither can sell, lease or mortgage the property without written consent of the other spouse. Divorce ends the tenancy in entirety which converts to a tenancy in common with one-half undivided interest going to each spouse. Upon death of a spouse, ownership automatically conveys to surviving spouse.

Aside from rights and obligations, there are certain accounting and creditor issues associated with each way of holding title. A prospective homeowner may want to seek advice from a tax advisor or legal counsel.

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About The Author

Elizabeth R. Elstien has worked in real estate for over 15 years as a real estate...

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