Like any industry, the Real Estate industry has their own terminology. When considering investing in Real Estate, either in buying a home of your own, or as a rental, it’s wise to become familiar with the terms.
In this blog, we focus on the TYPES of ownership.
When we buy a home or building on land, we will have “Title” to that piece of real estate.
TITLE is lawful owner of land, property and/or real estate in Fee Simple.
FEE SIMPLE The highest estate or absolute right in real property. The ownership may include Freehold ownership, but may be ownership of the building on leased land, or land owned by a Strata. (Strata ownership will be covered in next month’s Real Estate Terminology blog.)
FREEHOLD The ownership of a piece of land on which the home is located. The oldest and most common type of ownership of real estate. A freehold title is an interest in land that gives the holder full and exclusive ownership and use of the land and building for an indefinite period.
LEASEHOLD Alternately, your home may be located on leased land, a type of interest in a property that is certain only for a specified period of time granted by contract. A leasehold in land gives the holder the right to use and occupy the land and building for a defined period. This is common where a subdivision is created on First Nations Reserve land, where the Band desires development but cannot transfer ownership of the land. Leaseholds can be for varying lengths of time and it is not uncommon for a leasehold to be for 99 years, well past the expected life of the buildings.
CAUTION: When two or more people go together to purchase the home, whether they are married, common-law or jointly interested in investing, there are two types of ownership. Make sure your lawyer or notary uses the term you want reflected in title.
- TENANCY IN COMMON Ownership by two or more persons whereby, with the death of one of the people, the interest of that person does not pass to the survivor, but is treated as an asset of the deceased's estate. In this case, it will be determined by the Will as to who the new owner will be.
- JOINT TENANCY Ownership of land by two or more people whereby, on the death of one, the survivor or survivors take the whole estate. This is common in the case of a married couple where the surviving spouse becomes the sole owner.
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Regional & municipal business information - http://venturekamloops.com
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