At Old Woodward Title, we bring “old school” and “new school” techniques together, producing un-paralleled products and services in both the residential and commercial real estate marketplace.
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Solution Based Service
any consumers rely on their real estate agent or mortgage lender for a recommendation for a title company. However, it important that all homebuyers know that they have the right to shop for title insurance and to choose their own title agent or company. There are many factors to consider when selecting a title insurance company, such as local expertise, service standards, market conduct, and commitment to the community. Old Woodward Title checks all those boxes. We play an essential role in closing your transaction. We carefully review court records to determine if there are any:
Title insurance protects you against covered title defects, such as a previous owner’s debt, liens, and other claims of ownership that may have been instituted prior to purchasing your home.
A title insurance policy protects you from past issues regarding the title to your property, where other insurance policies such as property and casualty, deal with future risk.
A loan policy is required by the mortgage lender to protect against title defects that affect the lien of the lender’s mortgage. This policy is effective for the life of the loan.
An owner’s policy is a separate policy that helps protect you against title defects that could affect your ownership rights. This policy lasts as long as you or your heirs have, or retain an interest in the property.
Vesting in Michigan*
here are four common ways to hold title to real estate in Michigan:
Each type of ownership carries unique characteristics, and factors such as financial ability, family relations and marital status, elder law and estate planning implications, and creditor protection can significantly affect which form of title you select.
It’s helpful to point out that real estate law uses the term “tenant” when describing different title holders. Unlike a renter in a landlord-tenant relationship, a title-holding tenant is a property owner.
*For informational purposes only. Not to be taken as legal advice. Please consult an attorney for additional direction.
Tenants in Common (also known as Tenancy in Common) own an undivided interest in the property. Although the owners’ respective interests need not be equal, all of the tenants in common have an equal right to use or occupy the entire property. Tenancy in Common is popular for family cottages, hunting property, and undeveloped investment property.
If one owner dies, the survivor or survivors retain the deceased owner’s fractional interest without a right of survivorship, meaning that the deceased owner’s interest passes to his heirs or devisees if there is a will. The same is true if an owner sells his interest – the buyer only receives the seller’s fractional share with the right to use or occupy the entire property.
Where two or more people hold title as Tenants in Common, the deed should recite the respective interests of each, using words such as “to A and B, as Tenants in Common, each as to an undivided one-half interest.” If the respective interests are not expressly stated in the deed or otherwise recorded, there is a presumption that the owners’ interests are equal.
An advantage of a Tenancy in Common is the owner’s flexibility to convey or bequeath the interest to beneficiaries, or a trust. The owner’s estate plan must be carefully considered to be sure the owner’s interest is distributed according to his or her planning goals. The greatest disadvantage is that the severable interests are subject to probate court costs and delays following the death of one owner, which complicates estate planning for other owners.
Additionally, the financial difficulties of one owner can negatively impact another owner’s property interest. For example, if an owner had a judgment or lien against him, it could lead to foreclosure on his share in the property, or worse, a bankruptcy proceeding or government lien could force the sale of the property to satisfy his creditors unless the other owners are willing to pay off the creditors and buy out the insolvent owner.
And if an owner dies, there is the chance that the remaining owners may dislike or disagree with the person or people to whom the decedent left her interest. Fortunately, when co-tenants don’t get along or cannot agree on matters involving the property, one co-tenant can seek help from the courts by bringing an action for partition.
Tenants by the Entirety (also known as Tenancy by the Entirety) differ from Tenants in Common in one important way – the co-owners must be married, and transfers of their interests in the property are presumed to be as a married couple. It is an inseverable entity, unless specific language is included to negate the entireties interest. A spouse may convey property held by the entirety only to the other spouse, and, if both spouses convey or encumber the property, they must do so in the same instrument. Tenants in the Entirety may not pursue a partition action against one another.
In Tenancy by the Entirety, the married couple effectively own the entire estate, therefore neither can deal with the property independently of the other. The main advantage is that creditors of one party cannot enforce liens against the property, and if the debtor spouse dies first, the lien can never be enforced against the property.
In practical terms, although one spouse likely will not incur substantial debt without the other spouses’ involvement, if that does happen, the debt-free spouse can rest assured knowing that his or her real estate interest is safe so long as the property is held as Tenancy by the Entirety. By holding real estate as Tenancy by the Entirety, the husband and wife are creating a layer of defense against potential liability.
Title involving Joint Tenants (also known as Joint Tenancy) has two main characteristics – the right of survivorship and the right of partition. A joint tenancy is created by conveyance, i.e., “To A and B as joint tenants,” and upon the death of one joint tenant, the interest passes to the surviving joint tenants rather than to the heirs of the decedent. By law, each owner is entitled to the right of possession and cannot be excluded by another.
People are often confused by the difference between Joint Tenants and Joint Tenants with Full Right of Survivorship (below), unique to Michigan. People often intend that ownership be held as Joint Tenancy with Full Right of Survivorship, but unless it contains the magic words – “with full rights of survivorship” – they own the property as Joint Tenants.
The major drawback to this type of ownership is that if the co-owners disagree or quarrel, any of them can initiate an often expensive and time-consuming partition proceeding.
This is the same as a Joint Tenancy, but with the addition of language to prevent severance by transferring one owner’s interest. It is created by a conveyance to two or more people “as Joint Tenants with Full Rights of Survivorship,” and survivorship can only be destroyed by an act of all of the co-owners.
Like a Joint Tenancy, the death of a Joint Tenant with Full Rights of Survivorship leaves the deceased owner’s share to the surviving co-owner(s), and a will, trust, or other document specifying the deceased’s intent has no effect.
The interest of a deceased Joint Tenant with Full Rights of Survivorship or a Joint Tenant (without those important magic words) does not go through probate. Usually, recording a certified copy of the death certificate in the Register of Deeds office will suffice to extinguish the interest of the deceased joint tenant.