by Mike Reiner

At some point prior to the closing of your new home, you must decide how you want to hold title in your new home. You have to decide the name or names of the owners of the property. In my experience, it seems that very little time and attention is given to such an important decision. Make sure to think about all the various options and choose the one that best suits your personal circumstances. 

Let me first explain what I mean by “how you will take title.” When purchasing your home (the property), you are granted ownership from the seller in the form of a deed that is signed by the seller. The seller’s signature is witnessed by two people and is also acknowledged by a notary public or a commissioner of the superior court (a lawyer). 

This document, which typically consists of two pages--a page for the deed itself and a page for the legal description of the property--is then recorded on the land records and is a permanent record that shows who owns the property. When you decide how you are taking title, the decision at that time is permanent, because the deed is recorded forever on the land records where the town is located. You can always transfer the deed from the chosen name to another name, but the original name will always be part of the permanent land records. 

Many people ask whether the property can be held in the name of a corporation, a limited liability company, or various other entities recognized by the State of Connecticut. The short answer is that there is no prohibition to how title may be held, from a legal perspective; however, in almost every circumstance, a lender of one-to-four-family residential dwellings (in other words, your first-time home) requires that title be held in the name of one or more individuals. 

While there may be some reasons for holding title in the name of an entity, there is really no need to discuss the benefits in this article. Simply stated, to get a residential loan, you must hold title to the property in the name of one or more individuals.  If you are in the unusual circumstance of being able to purchase your home for all cash, taking title in an entity is a possibility; however, even in that most unusual set of circumstances, I still recommend that you take title in the name of an individual or individuals, because if you ever choose to refinance the property or even consider a home equity loan, again no lender would approve you for a loan if the property is not in your name. If the time arises that you continue purchasing real estate for investment purposes, it would be appropriate to consider establishing an entity to own that property.

If you are an individual purchasing the property, the question of how to take title is very simple. You should take title in your individual name. Be careful to make sure that your name is spelled correctly, and I also recommend that you use your middle initial and any suffixes (not professional designations, but for example, the suffix “Jr.”) that you use regularly.

If you are contemplating taking title in more than one person’s name, then in addition to making sure that your proper name appears, you now have to make another choice. In addition to listing the names of the individuals who will own the property, you must also designate how these individuals share in the property. For the purposes of this article, there are really only two choices for you to consider–taking title as joint tenants or as tenants in common. Each person who is listed on the title, during his or her lifetime, is free to sell his or her proportionate interest in the property to another party without permission of the other individual or individuals. This scenario is unlikely, because people don’t like to own property without the consent of all owners, but it is something that can occur. 

When the property is held as joint tenants, upon the death of an individual , the property passes to the surviving individuals, regardless of what is stated in a legal will. By way of example, if you own the property with your spouse as joint tenants and one of you dies, the surviving spouse automatically has title to the entire property. The land records reflect this fact by way of the statement in the deed saying that the property is held as joint tenants, and a certificate of demise would be filed to show the death of one of the individuals.

The reasons for holding the property as joint tenants is very simple. The arrangement allows for the property to be transferred without a will and is a common tool used to make sure that the survivor is guaranteed ownership of the property. This legal arrangement can never change unless the deed is changed, which would require the signature of all the individuals named on the deed.

The other common way to take title is by way of tenants in common. This term means that the individuals who own the property each own an equal, undivided interest in the property, but each individual will determine how the property is taken in the event of death. If an individual dies, the will (or the laws of the State of Connecticut, in the event that there is no will) determines who inherits the property.

In summary, for the purposes of a home buyer, title can be taken as follows:

       1. For an individual, in that individual’s name

       2. In the case of two or more individuals, by way of joint tenants, which means that the property  
           will  automatically vest in the surviving individual(s) at the time of death of one individual. 

      3. By tenants in common, which means that each individual owns an undivided interest in the
          property, and title to the property would change, pursuant to the will of any individual who dies. 
          As a rule for first-time home buyers, take title as tenants in common when you are individuals
          who are buying property together but are not married. If you are married or have a civil union, take 
          title as joint tenants, so the property automatically vests in the survivor. 

These rules are general, and it is best to have a discussion with your attorney to determine the best decision for your personal circumstances. Remember to ask this question, so you are given the best advice to suit your needs.    
 
Mike Reiner is an attorney and president of Reiner, Reiner and Bendett PC in Farmington, Connecticut. For more information, contact him at 860-255-5001 or by email at MReiner@reiner.com.