The two most common methods of property co-ownership are joint tenancy and tenancy in common. These two forms of co-ownership differ greatly, particularly with respect to disposition of the property. Here are three scenarios in which tenancy in common ownership is recommended.
A party wall is a common wall that divides two adjoining buildings, units or apartments and shared by the occupants on each side. A party wall usually provides structural support and/or fire protection between the two buildings or units but its maintenance and upkeep can cause rifts between neighbors.
What they say about real estate also applies to franchises: Location, location, location! If your business is not sited in a place that will draw customers, your business cannot succeed. So how do you find that most suitable place to open up your business?
Let's say you're brokering a deal between a client who wants to sell a business and potential buyers who are interested in acquiring just such a business. You arrange for your client to meet several of these buyers to discuss whether a deal is do-able. Later, your client tells you that none of them are really serious and he'd like some time to consider his options.
A couple of months go by, and you find out that he completed the sale of the business to one of the buyers you introduced him to. Not only is it infuriating and unfair to lose your commission in this way, it's unnecessary.
Every broker or agent who acts in an intermediary role in a transaction should have their clients sign a non-circumvention agreement to prevent just such an end run from occurring. There are many scenarios in which a non-circumvention agreement should be considered, for instance:
A party that owns certain technology agrees with another party to negotiate with interested third parties to develop and manufacture the technology. Party 1 agrees not to by-pass Party 2 and go directly to the manufacturers.
A venture capital lender agrees to provide a client seeking financing with leads to potential investors drawn from its network of established connections. In return, the client agrees not to consummate any transaction without compensating the lender.
A company hires independent sales agents to generate leads. Both parties mutually agree not to enter into any transaction with the other party's business contacts.
A non-circumvention agreement is typically conjoined with a confidentiality or non-disclosure agreement (NDA). This enables the parties to protect not only their business leads and contacts that they have worked so hard to establish, but all of the confidential information that they have exchanged with each other. Every NDA should include a non-circumvention clause to prohibit the person receiving the confidential information from circumventing the owner of that information by directly contacting its customers, employees and business contacts.
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A growing number of U.S. states have enacted laws that allow a home owner to record a Transfer on Death Deed (also called a beneficiary deed or a TOD) during their lifetime. This form of deed will transfer ownership of their property directly to the beneficiary (grantee) named in the deed when the owner (grantor) dies. This is a low-cost and trouble-free alternative to setting up a living trust in order to keep real estate property out of probate.
Yes. Because the Transfer on Death Deed does not become effective until the grantor's death, the grantor still owns the property and can deal with it as he or she sees fit, including mortgaging, encumbrancing or selling it, or changing or revoking the TOD. If the property is jointly owned, the last surviving owner can change or revoke the deed as they see fit. The beneficiary has no interest in the property, and therefore no say in what happens to the property, during the grantor's lifetime.
A Transfer on Death Deed keeps your real estate property out of probate after your death, which can reduce probate fees and speed up the process of distributing the estate assets. However, any applicable estate taxes will still be payable.
This is not available in all 50 states. Currently the only states that allow for recordation of Transfer on Death Deeds or Beneficiary Deeds are: Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Hawaii, Illinois, Indiana, Kansas, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, Virginia, Washington, West Virginia, Wisconsin and Wyoming. Regulations, requirements and limitations differ from state to state, but in general the procedure is very similar. If you own property in any of these states, you can record a Transfer on Death Deed or Beneficiary Deed and reduce the probate costs to your estate after your death. However - as usual - you can't avoid the taxes.
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