There are many situations in which current property owners want to add a new owner without giving up their own interest. This often occurs after a marriage, when the spouse that owned the property before the marriage wants to add the new spouse to the deed. It also occurs when parents want to add a child to a deed in order to create survivorship rights or otherwise give the child an interest in the property.
Adding the New Owner
Adding a new owner requires a deed to the property. The deed must be from the current owner or owners to both the current owner or owners and the person that will be added to the title.
Example: Peter and Paul want to add Mary to the title to their property. To do so, they will create a deed from Peter and Paul to Peter, Paul, and Mary. It is important that all three be listed as new owners to the property.
Don’t make the common mistake of transferring a partial interest in the property; instead, transfer the entire interest so that all owners have an interest in the entire property.
Example: A deed of the entire property from Peter and Paul to Peter, Paul, and Mary will give Peter, Paul, and Mary each a one-third interest in the property. This is usually what the parties intend. A deed of one third of the property to Mary will give Mary a full interest in one-third of the property and Peter and Paul each an undivided one-half interest in the remaining two-thirds of the property.
In most case, transferring partial ownership unnecessarily complicates title and defeats the purpose of the deed. To avoid these issues, it is usually best to transfer the entire interest in the property to all owners.
Choosing the Form of Co-Ownership
When adding a new owner, it is important to choose the correct form of co-ownership. The form of co-ownership affects the legal rights to the property and should be specified in the deed. See What Are the Forms of Co-Ownership? for more information about the options available.
Our deed creation software guides you through the process of choosing the form of co-ownership. If any of the new owners are trusts or businesses, the software will automatically title the property as tenants in common. If all of the new owners are individuals, the software will allow you to choose between tenants in common, joint tenants with right of survivorship, and community property or tenancy by the entirety.
Unities of Title and Strawman Conveyances
As stated in our discussion of the forms of co-ownership, a joint tenancy requires four unities of title. This means that all of the following must occur for a joint tenancy to exist:
- The joint tenants’ interest must all begin at the same time;
- The joint tenants must all receive the same interest;
- The joint tenants must all receive title in the same deed or other instrument; and
- All joint tenants must have equal right to control and possess the property.
These requirements are satisfied in a deed that conveys property from the transferor to other owners with the special language required to create a joint tenancy with right of survivorship. But issues can arise when one or more current owners want to keep an interest in the property while adding a new owner.
Example: Peter is the current owners of the property. He wants to add Paul to the property using a deed that creates a joint tenancy with right of survivorship between Peter and Paul. Because Peter already owns the property before the deed is signed, his interest begins before Paul’s interest in the property. This does not meet the requirement that the joint tenants’ interest must all begin at the same time.
In this situation, the four unities of title are not technically present. Historically, real estate attorneys have used a strawman conveyance to satisfy this requirement. In a strawman conveyance, the original owner would transfer property to a third party (the strawman), who would then transfer property to the original owner plus the new owner. This artificially created a situation where both the current owner and the new owner received their interest from the strawman at the same time.
Thankfully, most states—including California and Florida—now take a commonsense view and do not require strawman conveyances to create a joint tenancy with right of survivorship. In Texas, the problem does not arise since the right of survivorship is created by separate agreement instead of by unities of title.