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Deed Vesting Types
Vesting Types and their Impact on Ownership and Transfer Rights
Sole Ownership: This is when one person or entity individually owns the property. This can be a person, an LLC or an Estate.
Tenants In Common: Tenants in Common is when more than one person or entity each owns a percentage of the property. Upon each owners death the percentage owned is passed to the heirs of the deceased, not to the other property owners. In the event that the Deed does not state the tenancy, the default assumed is Tenants in Common, assuming the Deed does NOT specify they are married.
Joint Tenants: Joint Tenants is when more than one person or entity own the entire property and gives rights of survivorship. Meaning, when one person dies, their interest in the property is automatically passed to the other property owners.
Tenants by the Entirety: (not recognized in Arizona)Tenants by the entirety is reserved for a married couple that owns property together that adds a layer of protection from creditors. Upon death, the property automatically transfers to the other property owner like with Joint Tenants. If the owners are married and the Deed indicates the two parties are married, Tenants by the Entirety is automatically formed.
Community Property with Rights of Survivorship: Arizona allows legally married couples to own real estate as community property, with or without rights of survivorship. The rules and definitions are set forth at Section 33-431 of the Arizona Revised Statutes. Under this form of ownership, both spouses hold undivided shares of the whole, and when one spouse dies, the survivor gains ownership of the whole property without the need for probate, and both halves receive a new tax basis equal to the fair market value as of the date of death. Otherwise, when one spouse dies, the community property is divided equally, with half going to the surviving spouse and half distributed as directed by the deceased spouse’s will. In case of divorce or annulment, the judge often determines equitable distribution of community property.
Deed Types – Conveyance of Property
The type of Deed being used will be displayed at the top of the Deed. There are many types of Deed, but the most common are as follows:
Quit Claim Deed: A Quit Claim Deed is typically used to give property to someone else, typically with no monetary exchange. The Grantor of the Deed is quitting their claim to the property. This deed offers no warranty to the Grantor.
Bargain and Sale Deed: A Bargain and Sale Deed conveys the property from one person to another without warranty similarly to a Quit Claim Deed. A Bargain and Sale Deed is typically used when there is a monetary exchange.
Warranty Deed: A Warranty Deed offers complete warranty of title to the Grantee. The Grantor of a Warranty Deed is guaranteeing there are no issues with the Chain of Title, or any liens against the property.
Special Warranty Deed: A Special Warranty Deed is similar to a Warranty Deed, however, the Grantor is only guaranteeing the property is free and clear of defect for only the time that they owned it.
Treasurer Deed: A Treasurer Deed is issued by the County Treasurer where the property is located as a result of non-payment of property tax