In last month’s blog article, we explored the most common ways to hold title in Michigan. This month we’re turning our attention to Florida and the tenancy options available there. Although many ownership concepts are similar, Florida has its own rules, terminology, and legal considerations that can influence how property is owned, transferred, and inherited.
Why Tenancy Matters in Florida
As we previously discussed, how property ownership is structured on the deed is more than just a legal formality — it can have significant implications for your rights as an owner. The way title is held determines what happens if an owner decides to sell their interest, passes away, gets divorced, or transfers ownership to someone else.
The state of Florida is unique because it has a large number of second homes, vacation properties, investment properties, and retirement residences. Choosing the right form of tenancy can help ensure Florida properties are managed and transferred according to the owners’ intentions.
Common Ways to Hold Title in Florida
There’s no single best way to hold title to real estate. The most appropriate ownership structure depends on factors such as who is purchasing the property, how it will be used, and the owners’ long-term goals for the property.
Florida recognizes several common forms of property ownership:
- Individual Ownership – Sometimes referred to as sole ownership, this means that one person holds title to the property in their name alone. That individual has complete authority to sell, transfer, refinance, or otherwise manage the property without the consent of another owner. After the owner’s death, unless the property has been placed in a trust, it will generally become part of the owner’s estate and may need to pass through Florida’s probate process before ownership can be transferred to heirs. Best for: Single buyers or real estate investors.
- Tenants in Common – A tenancy in common allows two or more people to own the same property while each holds a separate ownership interest. These ownership interests do not have to be equal. For example, one owner may own 50% of the property while the others own 25% each, or the percentages may be divided in any way the owners choose. Each owner has the right to sell, transfer, or leave their ownership interest to someone else without affecting the interests of the other owners.
A tenancy in common does not include a right of survivorship. If one owner dies, that person’s ownership interest generally becomes part of their estate and is transferred according to their will or Florida’s intestacy laws. It does not automatically pass to the surviving co-owners. Best for: Unmarried partners, family members, friends, investors, or co-owners who want flexible ownership percentages.
- Joint Tenancy with Right of Survivorship – This allows two or more people to own property together while providing an automatic transfer of ownership when one owner dies. Instead of becoming part of the deceased owner’s estate, that owner’s interest passes directly to the surviving owner(s). In Florida, this form of ownership must be clearly stated in the deed, with language that expressly establishes the owners’ intent to create survivorship rights. Best for: Co-owners who want the property to pass automatically to the surviving owner or owners.
- Tenancy by the Entireties – A form of property ownership available only to married couples in Florida. The spouses are considered to own the property together as a single legal unit rather than two separate owners. When one spouse dies, the surviving spouse automatically becomes the sole owner of the property without the deceased spouse’s interest passing through probate.
Additionally, the property may be protected from creditors seeking to collect a debt owed by only one spouse. The deed should clearly reflect the spouses’ intent to hold title in this manner, including language identifying the owners as “husband and wife” or “tenants by the entirety.” Best for: Married couples purchasing property together who want survivorship rights and potential creditor protection.
Other Florida Ownership Considerations
Besides common forms of tenancy, Florida property may also be owned through other legal structures. These options encompass:
- Homestead Considerations: Florida’s homestead laws can affect property ownership, transfer, creditor protection, and inheritance. Because these rules are complex and vary by situation, homeowners should consult a qualified Florida attorney for guidance.
- Trust Ownership: Property may be titled in a trust as part of an estate plan. Trust ownership can help achieve estate planning goals and, in some cases, simplify the transfer of property after the owner’s death.
- LLC or Business Ownership: Investment, rental, and commercial properties are often owned by a limited liability company (LLC) or other business entity. This structure may offer liability, management, or tax advantages, depending on the owner’s objectives.
- Life Estate or Enhanced Life Estate Deed: Florida allows certain estate planning tools, such as life estates and enhanced life estate deeds (often called Lady Bird deeds), that enable an owner to retain rights to the property during their lifetime while planning for its transfer after death.
Michigan vs. Florida: Why You Should Not Assume They Are the Same
While many tenancy options have similar names across states, the rules behind them can vary significantly. A form of ownership that works one way in Michigan may have different requirements or implications in Florida.
The wording used on the deed is especially important. The way ownership is described can determine whether certain rights, such as survivorship rights, are created. Simply listing multiple owners on a deed does not always produce the intended result.
Florida also has unique considerations, including its homestead protections and rules surrounding tenancy by the entireties. Buyers should understand Florida’s ownership rules rather than assuming they’re the same in Michigan, and those who own property in both states should review each transaction separately.
Other common mistakes to avoid include:
- Assuming survivorship rights exist automatically.
- Buying with family or friends without documenting ownership percentages.
- Not reviewing title before or after marriage, divorce, death, or estate planning changes.
Vanguard Is Well-Versed in the Tenancy Process
The way you hold title in Florida can have long-term consequences for ownership, transfer rights, estate planning, and what happens after an owner passes away. Vanguard Title can help buyers, sellers, agents, and lenders navigate the title process with confidence in both Michigan and Florida.
Together with your attorney and/or estate planning advisor, we can help determine the best ownership structure for your situation, explain how title will appear on the deed, and ensure ownership documents are prepared correctly.