There are several ways that individuals can acquire and transfer interests in land. The method used will depend on the type of interest being transferred.
Typically, ownership interests are established and documented through a deed. The deed identifies the parties involved in the transaction, the legal description of the property, and the type of ownership interest being transferred.
Purchase
Acquisition and transfer of property interests can be accomplished in various ways. These methods include purchase, sale, gift, and lease.
A purchase involves paying a specific amount for an item or asset. It is a regular financial operation that individuals and businesses can perform.
The most common type of purchase is a sale, where the property is transferred from one owner to another. State and local laws govern this process.
Property values always increase over time. A good investment can bring a big profit when sold. Peter Hungerford founder of PH Realty Capital, has transferred ownership of different real estate properties and worked with experienced real estate attorneys. They helped him find the best way to structure the deal.
Lease
Leases are contracts between a property owner (the lessor) and a tenant or lessee for the use of a piece of property. They provide both parties transparent terms and conditions outlining their relationship and the rental agreement.
A lease may be for a fixed period, or it can be month-to-month. Leases usually require a security deposit and monthly rent payments. They also indicate if a tenant has the right to sublet or if there are any monetary penalties for early termination of the lease.
A lease is a legal contract enforceable in court. It is generally transferable by assignment unless the lease expressly restricts the ability to do so. However, it cannot be transferred if the rights violate state or federal law. Some leases include early termination clauses that allow tenants to terminate the lease under certain circumstances (job-related relocation or divorce-induced hardship) or if their landlords fail to fulfill their contractual obligations.
Gift
A gift is a transfer of property with no expectation of repayment. It is often done to show affection or gratitude, but it can also sustain social relationships and contribute to social cohesion.
Acquisition and transfer of property interests may occur by purchase, inheritance, gift, or adverse possession. These ownership interests are essential for possession, the right to transfer, the right to profits from land, and liability.
The legal form of an interest in land varies by jurisdiction and can include tenancy in common or joint tenancy. Both have equal rights of possession and a devisable interest, but joint tenancies have different legal limits and rights for disposal.
A written deed is generally required to convey real property acquired through a gift. The deed must state that the person making the gift intends to make a gift of title and deliver the deed to the recipient, and the gift must be accepted.
Adverse Possession
Adverse possession is a legal claim that allows someone to gain title to land they have been using without the owner’s permission. It’s similar to homesteading in practice, where government-owned land is granted to people who live on it, pay taxes and care for it for a certain period.
To win adverse possession, the trespasser must be open about their claim of ownership and continue to use the property for a set period, usually three to 30 years. This statutory time limit varies by jurisdiction.
Adverse possession is often a result of negligence on the part of the landowner. If the owner leaves their land unused and unclaimed for a long time, it is a good idea for society to recognize that person as the valid owner of that property.