How to Hold Title (and Other Documents Buyers Sign) When Purchasing Hawaii Properties
(Honolulu, Hawaii) So you are buying property in Hawaii? One thing to consider is how you will hold title on that property. Will you own it by yourself, with your wife, children, or partner(s)? Below is a list of ways to hold title in the State of Hawaii.
How to Hold Title in Hawaii
There is a mountain of documents that you will sign, including how taxes are paid, what escrow forms need to be filed, etc. Here are complete forms of real estate escrow documents that you will be asked to read and/or sign when opening escrow or purchasing property. These forms are courtesy of a Hawaii title company.
If you will plan on holding title as a corporation or LLC, consult an attorney for advice. However, for simple purchase transactions, you may choose from one of the following options:
Tenants by the entirety is a special joint tenancy between a lawfully married husband and wife, or reciprocal beneficiaries, which places title to the property into the unit with both tenants having an equal, undivided interest in the whole property. Upon the death of one tenant, the survivor succeeds to the entire property to the exclusion of heirs and creditors of the deceased tenant and without the need for probate.
A tenancy by the entirety differs from a joint tenancy in that neither spouse can convey his or her interest, or force a partition during the lifetime of the other without the consent of the other spouse. It can only be severed by mutual agreement, divorce, serving the reciprocal beneficiary relationship, or joint conveyance.
Tenancy in Common
Tenancy in common is a form of concurrent ownership of property between two or more persons in which each has an undivided interest in the whole property. Each co-tenant is entitled to the undivided possession of the property, according to his proportionate share, and subject to the rights of possession of the other tenants. Their interests may be equal (as in joint tenancy) or unequal.
Where the conveyance document does not specify the extent of interest of each co-tenant, there is a presumption that the shares are equal. There are no rights of survivorship. Any tenant in common can sell his interest in the property without the consent of his co-tenants.
Tenancy in Severalty
Tenancy in severalty is ownership of property vested in one person alone and does not specify the extent of interest of each co-tenant; there is a presumption that the shares are equal. There are no rights of survivorship. Any tenant in common can sell his interest in the property without the consent of his co-tenants. Not held jointly with another, also called Several Tenancy or Sole Tenancy. When the sole owner dies, the property is probated and passes to his heirs or devisee.
Joint tenancy is a form of property ownership by two or more persons in which the joint tenants have one and the same interest, arising by one of the same conveyance, commencing at one and the same time and held by one and the same possession (the concept of the “four unities”).
A distinctive feature of the joint tenancy is the right of survivorship by which the surviving joint tenant(s) succeeds to the interest of the deceased joint tenant. No probate proceedings are necessary.
Before You Open Escrow…
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