Ownership Structures in Real Estate: Individuals, Co-Owners, and Entities

What “Holding Title” Means (and Why Structure Matters)

When you buy real estate, your name (or an entity’s name) is placed on the deed. That is “holding title.” The way title is held is not just paperwork—it affects three practical outcomes:

• Control: Who can make decisions (sell, refinance, lease, remodel) and what approvals are required.
• Transfer: What happens if an owner dies, wants to gift their share, or needs to sell.
• Risk: How exposure to lawsuits, creditor claims, and disputes may affect the property and the owners.

Ownership structure is a planning tool. Two people can own the same property value, but have very different rights depending on whether they are joint tenants, tenants in common, spouses under tenancy by the entirety, or owners through an entity like an LLC or trust.

Quick vocabulary you’ll see in deeds

• Title holder: The person/entity named on the deed.
• Undivided interest: Each co-owner owns a share of the whole property, not a specific bedroom or floor (unless there is a legal subdivision or condo unit).
• Right of survivorship: If one owner dies, their share automatically goes to the surviving owner(s), outside of a will (in many cases).

Sole Ownership (One Person or One Entity)

What it is: One owner holds 100% of title. The owner can be an individual (e.g., “Alex Rivera”) or an entity (e.g., “Rivera Rentals LLC”).

Why people choose it: Maximum simplicity and control—one decision-maker.

Control and decision-making

• The sole owner can sell, refinance, or lease without needing another owner’s signature (lenders may still require spouse acknowledgments in some states, but that is separate from title structure).

Inheritance example

Alex owns a house in sole ownership. Alex dies. The house does not automatically go to anyone unless there is a beneficiary mechanism (like a transfer-on-death deed where available) or a will/trust plan. Otherwise, it typically becomes part of Alex’s estate process.

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Risk example

If Alex is sued personally (for something unrelated to the property), Alex’s ownership interest may be reachable by creditors depending on state law and the type of claim. Sole ownership does not create a separate “liability container.”

Co-Ownership Structures (Two or More Owners)

Co-ownership is common for couples, family members, and investment partners. The key differences are (1) survivorship, (2) whether shares must be equal, and (3) how easily an owner can transfer their share.

Joint Tenancy (Often Used for “Automatic Inheritance” Between Co-Owners)

What it is: Two or more people own the property together with a right of survivorship. When one joint tenant dies, their share automatically passes to the surviving joint tenant(s).

Plain-language inheritance example

Maya and Jordan buy a cabin as joint tenants. Maya dies. Jordan becomes the sole owner automatically (subject to local recording steps). Maya’s share does not pass through Maya’s will to Maya’s siblings.

Decision-making example

Maya and Jordan want to sell. Typically, both must sign the deed to sell the whole property. If only one wants to sell, they may be able to sell/transfer their own interest, but that can change the structure (see below).

How joint tenancy can be “broken”

If one joint tenant transfers their interest to someone else (even by gifting), the right of survivorship can be disrupted. The new co-ownership may become tenancy in common between the remaining owner and the new owner, depending on state law and how the deed is drafted.

Practical step-by-step: using joint tenancy intentionally

1. Confirm the goal: Is the main goal survivorship (automatic transfer at death) between co-owners?
2. Check eligibility and wording: Deeds usually must clearly state “as joint tenants with right of survivorship” (exact phrasing varies).
3. Plan for “what if” scenarios: What if one owner wants out early? What if one owner’s heirs expect to inherit?
4. Coordinate with financing: If there is a mortgage, the lender’s rules and due-on-sale clauses may limit transfers.

Tenancy in Common (Flexible Shares, No Automatic Survivorship)

What it is: Two or more people own the property with separate shares that can be equal or unequal. There is no automatic right of survivorship unless separately arranged.

Plain-language inheritance example

Three siblings—Ava, Ben, and Chris—inherit a duplex as tenants in common, each with a 1/3 share. Ava dies and leaves everything to her child. Ava’s 1/3 share goes to her child (through Ava’s estate plan or estate process), not automatically to Ben and Chris.

Decision-making example

Ben wants to sell the duplex; Ava and Chris want to keep it. Ben may be able to sell his 1/3 interest to someone else (often hard to find a buyer), or pursue a legal process to force a sale/partition in some jurisdictions. This is why written agreements matter.

When tenancy in common fits well

• Unequal contributions: One investor puts 70% down, another puts 30%.
• Different exit timelines: One owner expects to sell in 3 years; another wants long-term hold.
• Estate planning goals: Each owner wants their share to go to their own heirs.

Practical step-by-step: reducing conflict in tenancy in common

1. Write a co-ownership agreement: Cover who pays what (mortgage, taxes, repairs), how decisions are made, and what happens if someone stops paying.
2. Define exit rules: Right of first refusal, buyout formulas, appraisal process, and timelines.
3. Set leasing/management authority: Who can sign leases? Who chooses tenants? Who approves major repairs?
4. Plan for death/disability: If an owner dies, can the remaining owners buy the share from heirs? Under what terms?

Tenancy by the Entirety (Where Applicable for Married Couples)

What it is: A form of co-ownership available in some states/jurisdictions for married spouses (and in some places, certain registered partnerships). It often includes survivorship features and typically treats the couple as a single legal unit for ownership purposes.

Why it matters in practice

• Unified control: Often, both spouses must agree to sell or mortgage the property.
• Potential creditor protection: In some jurisdictions, a creditor of only one spouse may have limited ability to force sale of the property (rules vary widely).
• Survivorship effect: Often, if one spouse dies, the other becomes sole owner automatically.

Plain-language example

Sam and Taylor are married and hold their home as tenants by the entirety. Sam is sued personally for a business dispute. Depending on local law, the claimant may not be able to attach the home if the debt is only Sam’s. But if both spouses are liable, protection may not apply.

Practical step-by-step: using tenancy by the entirety thoughtfully

1. Confirm availability: Not all states recognize it, and eligibility rules differ.
2. Confirm the deed language: The deed must usually specify the form of ownership.
3. Understand creditor rules: Ask a local attorney how single-spouse vs joint debts are treated.
4. Coordinate with estate planning: Survivorship may override what a will says about the property.

Entity Ownership (Conceptual Overview): Owning Through a “Wrapper”

Instead of individuals holding title directly, an entity can hold title. The people then own or control the entity. This can change how decisions are made, how ownership interests are transferred, and how risk is managed.

LLCs (Limited Liability Companies)

Concept: An LLC can own property, and the members own the LLC. Many investors use LLCs to separate property-related risk from personal assets (not a guarantee; it depends on proper operations and the type of claim).

• Control: Defined by an operating agreement (who manages, voting thresholds, authority to sign leases/sell).
• Transfer: You can transfer membership interests rather than deed the property (subject to lender and agreement limits).
• Risk: Often used for liability separation, especially for rentals.

Corporations

Concept: A corporation can hold title, with shareholders owning the corporation. Corporations are common for operating businesses; they can own real estate too. Governance is more formal (officers, directors, minutes) than many LLCs.

• Control: Board/officers manage; shareholder voting for major actions.
• Transfer: Shares can be transferred, but restrictions often apply.
• Risk: Liability separation can exist, but formalities matter.

Partnerships (General and Limited)

Concept: Two or more partners own a partnership that owns property. Partnerships can be simple but can also create risk if partners have authority to bind the partnership.

• Control: Set by partnership agreement; who can sign contracts is critical.
• Risk: In a general partnership, partners may have personal liability for partnership obligations; limited partnerships can separate roles (general vs limited partners).

Trusts (Living Trusts and Other Trust Arrangements)

Concept: A trust can hold title, managed by a trustee for beneficiaries. Trusts are often used to manage transfer at death and continuity of management.

• Control: Trustee acts under the trust document.
• Transfer: Can streamline inheritance and management transitions.
• Risk: Trusts are primarily a transfer/management tool; liability outcomes depend on structure and local law.

Condo Associations and HOAs as Governance Frameworks (Not “Ownership of Your Unit,” but Rules Around It)

Concept: In condos and many planned communities, you may own your unit/lot, but an association governs shared property and community rules. This is not an “ownership structure” like joint tenancy, but it is a decision-making layer that affects what owners can do.

• Control: Rules may limit rentals, exterior changes, pets, parking, and use of common areas.
• Costs: Regular dues and potential special assessments.
• Transfer: Buyers often must accept the governing documents; some communities have leasing caps or approval processes.

How Structure Affects Real-Life Decisions: Control, Transfer, and Risk

1) Selling or refinancing

• Sole ownership: One signature (plus lender requirements).
• Joint tenancy / tenancy in common: Usually all owners must sign to sell the entire property; refinancing typically requires all owners/borrowers the lender approves.
• Entity ownership: Authorized signer acts for the entity, but internal approvals may be required (operating agreement, board resolution).

2) Death of an owner

• Joint tenancy / tenancy by the entirety: Survivorship usually moves ownership to the survivor(s) automatically.
• Tenancy in common: The deceased owner’s share passes to heirs/beneficiaries, potentially creating new co-owners.
• Trust/entity: Control can continue under trustee/manager without changing the deed each time someone dies (depending on structure).

3) Disputes and “stuck” co-owners

Co-ownership can create gridlock: one person wants to sell, another wants to keep; one wants to renovate, another refuses to pay. Entity documents or co-ownership agreements are the main tools to prevent stalemates.

Decision Scenarios: Choose a Structure and Explain the Trade-Offs

Scenario A: One buyer, primary residence, wants maximum simplicity

Likely fit: Sole ownership (individual) or a living trust holding title (if the goal is smoother transfer/management).

• Simplicity: Highest with sole ownership.
• Control: One decision-maker.
• Liability separation: None just from title; insurance and personal planning matter.
• Transferability: Trust can improve continuity; sole ownership may require estate steps unless other tools are used.

Scenario B: Two unmarried partners buying a home, both paying, want fairness if they split

Likely fit: Tenancy in common with a written agreement.

• Simplicity: Moderate (more paperwork than joint tenancy).
• Control: Shared; agreement can define who decides what.
• Liability separation: None just from title.
• Transferability: Each can transfer their share; agreement can require buyout/first refusal to avoid an unwanted new co-owner.

Step-by-step approach:

1. Decide ownership percentages (e.g., 60/40 if down payments differ).
2. Draft a co-ownership agreement: payment responsibilities, buyout triggers, sale process, dispute resolution.
3. Confirm deed reflects tenancy in common and the intended percentages (where recorded/recognized).

Scenario C: Married couple buying a home in a state that recognizes tenancy by the entirety; one spouse has higher lawsuit risk

Likely fit: Tenancy by the entirety (where available) or consult counsel about alternatives.

• Simplicity: Similar to joint tenancy for day-to-day living.
• Control: Often requires both spouses to act—good for preventing unilateral transfers, but can slow decisions.
• Liability separation: Potentially stronger protection from one spouse’s separate creditors (jurisdiction-specific).
• Transferability: Usually not freely transferable by one spouse alone.

Scenario D: Two friends buying a vacation property; they want it to go automatically to the survivor

Likely fit: Joint tenancy (if survivorship is the priority) plus a written usage/expense agreement.

• Simplicity: High for inheritance between them (survivorship).
• Control: Shared; both typically must sign to sell.
• Risk: Each owner’s personal issues can affect the shared property; agreement helps manage payments and scheduling.
• Transferability: One owner’s transfer can disrupt survivorship; plan for exit rules.

Scenario E: Three investors buying a small rental; they want clear roles, liability separation, and an easy way to add/remove an investor

Likely fit: LLC ownership with an operating agreement.

• Simplicity: Lower than personal title (setup, filings, separate banking), but clearer governance.
• Control: Can be manager-managed; voting thresholds for major actions (sell/refinance) can be defined.
• Liability separation: Often a key reason to use an LLC for rentals (not absolute; requires proper operation and adequate insurance).
• Transferability: Membership interests can be transferred with restrictions; operating agreement can require approval and set pricing/buyout terms.

Step-by-step approach:

1. Form the LLC and open a dedicated bank account.
2. Draft an operating agreement: capital contributions, profit splits, manager authority, decision thresholds, buy-sell provisions.
3. Have the LLC take title on the deed at purchase (or transfer later with lender/tax advice).
4. Maintain separation: contracts in LLC name, proper signatures, clean accounting.

Scenario F: Parent and adult child buy a property together; parent wants their share to pass to multiple children, not automatically to the co-owner

Likely fit: Tenancy in common (possibly paired with a trust for the parent’s share).

• Simplicity: Moderate.
• Control: Shared; agreement can prevent deadlock and define who lives there, who pays, and how to sell.
• Transferability: Parent’s share can pass according to their plan rather than survivorship.

A Simple Selection Checklist (Use Before You Choose)

• Do you want automatic survivorship? Consider joint tenancy or tenancy by the entirety (where applicable). If not, consider tenancy in common or a trust-based plan.
• Are ownership shares unequal? Tenancy in common or an entity is usually more flexible.
• Do you need rules for decision-making and exits? Use a co-ownership agreement or entity documents; don’t rely on “we’ll figure it out.”
• Is liability separation a priority (especially for rentals)? Consider LLC/entity ownership plus strong insurance and proper operations.
• Will the property be subject to HOA/condo rules? Review governing documents early because they can limit rentals, renovations, and even buyer eligibility.