Sunday, December 28, 2014

Cohabitation and Real Estate (a primer for gay and straight non-married couples who own or want to buy Real Estate)

          In Florida, there are three recognized states of real property ownership. First is Tenants in Common in which each party owns a distinct interest of the real estate, generally 50-50 if equally shared but ownership can be in any percentage or multiple percentages if there are more than two owners.  If the deed is silent on the percentage of ownership, the shares are always deemed as equal. Upon the death of anyone owner, the interest of that deceased owner passes to that owner’s heirs at law. 

          The second estate is called Joint Tenancy, in which each owner owns the entire estate together and is distinct from Tenants in Common. If properly created, the interest of a deceased owner passes to the surviving joint tenant.  In Florida, because a simple joint tenancy is deemed to create a tenants in common relationship it is crucial that the deed state “joint tenants with full rights of survivorship and not tenants in common” to make sure the intent of the parties at the time of creating the estate is met.  Creditors of one of the joint tenants can lien and attach the joint tenant’s ownership interest, and upon foreclosure the purchaser of the property at the foreclosure sale becomes a tenant in common with the other owner, breaking the joint tenancy.

          The third estate is called Tenants by the Entireties and is reserved to married couples in the state of Florida.   In addition to having a survivorship benefit like a joint tenancy, the Tenants by the Entireties estate also prevents the creditors of one owner from reaching the interest held by the other owner.

          Under current Florida law, gay marriage is not recognized, and therefore gay couples who are legally married in other states cannot take advantage of this type of estate.  At the beginning of next year, the legal stay currently in effect regarding gay marriage will expire and it is possible that marriage certificates will be issued to gay couples while the case challenging the Florida constitutional prohibition on gay marriage is appealed. It would appear that if a gay couple obtains a marriage certificate then they will also be eligible to hold real property as Tenants by the Entireties.

          Under Florida real property law simply stating “husband-and-wife” or “his/her spouse” after the grantee’s name in any deed creates the Tenants by the Entireties estate.  No case has addressed whether stating “husband and husband” or “wife and wife” will be sufficient to create the desired estate. Therefore it is recommended the any deeds delivered to a gay married couple state with specificity the intent to create the Tenants by the Entireties estate. In addition, due to the uncertainty of the law, I would recommend also adding the following to any deed created while the gay marriage ban is appealed: “In the event it is determined that the Florida constitutional ban on gay marriage is constitutional, and the marital status of the grantees hereunder is voided, is the intent of the parties to create a joint tenancy with full rights of survivorship and not tenants in common.”  Otherwise, if the estate is not created properly, the estate would revert to Tenants in Common which would not effectuate the right of survivorship that most couples desire.

          Please also note that to create joint tenant estate or the tenant by the entireties estate certain elements must exist at the time of the conveyance as follows:

          1.       The owners must acquire the property at the same time;

          2.       The owners must have the same title to the property;

          3.       The owners must have an equal share in the property; and

          4.       The owners must have equal right to possession of the property.

          Therefore, even if a gay couple currently owns Florida property jointly with their significant other, or were married in another state, the fact that the ban on gay marriage may become unconstitutional does not automatically create the Tenants by the Entireties estate. This also applies to couples who acquired property together before marriage and then thereafter became married, or who, prior to marriage, only held title in one of the spouse’s names.

          In order to rectify the situation, it will be necessary for the owners to reconvey the property to themselves with the proper vesting language.  For example, if Mary and Jane Smith acquired property in 2005 as joint tenants with right of survivorship, and legally become married in Florida after January 2015 they would have to execute a new deed to themselves conveying the property and asserting the creation of the Tenants by the Entireties estate. If only Mary Smith owned the property prior to the legal marriage, she would have to convey the property to both herself and Jane Smith to create the estate, and, if the property was there homestead, Jane Smith would have to join in the deed as the spouse of Mary Smith to clear her Homestead interest.

          Many unmarried couples whether gay or not, who later become married, will find out the hard way that that deed which conveyed title to their property did not result in the survivor owning the property after their co-owners demise, but instead allowed the heirs of the deceased spouse to inherit. If you own property with another person which was acquired before marriage, you should take action to ensure that your interests are protected and that your intent to provide for survivorship is legally enacted.


Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.  They specialize in real estate and can assist owners in drafting deeds and trusts to insure proper transfer of assets.  They can be reached at 561.594.1452, or at mjposner@warddamon.com

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