Co-Ownership Types: Direct and Indirect

• Co-ownership involves multiple parties sharing property rights and can be structured in various ways.

Indirect Co-Ownership

• An individual owns an interest in an entity that owns the real property.
• Examples include owning shares in a Real Estate Investment Trust (REIT) or a corporation that owns real estate.

Direct Co-Ownership

• Individuals hold the title to the property themselves, sharing the property rights directly.
• Common examples include Tenancy in Common, Joint Tenancy, Condominiums, and Cooperatives.

Tenancy in Common (TIC)

• One of the most common and least restrictive forms of joint ownership.
• Each owner has their own separate interest in the property; interests need not to be equal.
• Owners can transfer or mortgage their share without the other co-owners' permission.
• There is no right of survivorship; when a TIC owner dies, their share passes to their heirs.
• TIC offers flexibility in ownership percentage and the ability to sell or mortgage interests independently.

Joint Tenancy

• Multiple individuals own property together with equal rights.
• Requires four conditions to be valid: unity of time, unity of interest, unity of possession, and unity of title..
• All joint tenants must acquire their interests at the same time.
• Each joint tenant must have equal shares in the property.
• All joint tenants have an equal right to possess the entire property.
• A key characteristic is the right of survivorship; if one joint tenant dies, their share automatically transfers to the surviving joint tenants.
• Joint tenancy is not inheritable; the deceased tenant's share goes to the surviving co-owners, not their heirs.
• If one joint tenant sells or transfers their share, the joint tenancy is broken and becomes a tenancy in common.
• The default form of co-ownership for a married couple buying property together is joint tenancy.

Condominiums

• Individuals own their units in fee simple but share ownership of common areas.
• Owners hold full ownership of their individual units.
• Common areas are jointly owned and maintained by all unit owners through a condominium association.
• Condominium owners pay mandatory association fees for the maintenance and upkeep of common areas.
• You own your unit outright but share ownership of amenities.
• The condominium association manages the common areas, and fees support that management.

Cooperatives

• Residents own shares in a corporation that owns the building, rather than owning their units outright.
• Residents own shares in the cooperative corporation, which entitles them to occupy a specific unit but do not own the real estate directly.
• Each shareholder is granted a proprietary lease for their unit, allowing them to live there for a long term.
• Cooperatives tend to be less expensive than condominiums because residents own shares in the corporation, rather than owning the property.
• The lease for a co-op unit generally terminates when the shareholder sells their share in the corporation.
• Condo owners hold a legal interest in the individual unit and the common areas.
• Co-op owners hold shares in the corporation, which owns the entire building.