DEAR BOB: Recently I told my lawyer to include the name of my wife on my home as “joint tenancy with right of survivorship.” But when I read the quit claim deed, it says “tenancy by the entireties.” Is this the same thing? – Juan A.
DEAR JUAN: No. Tenancy by the entireties is a special version of holding title as joint tenancy with right of survivorship. It is allowed only when a husband and wife hold title to real estate in some states.
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The legal result is the signatures of both spouses are required to sell or encumber tenancy by the entireties property. When one spouse dies, the surviving spouse then owns the entire property, the same as with joint tenancy. The deceased’s will has no effect on either joint tenancy or tenancy by the entireties property.
By comparison, if title is held in joint tenancy, one joint tenant can usually convey or encumber his/her share alone (thus breaking up the joint tenancy and creating a tenancy in common without the other joint tenant’s approval). But this isn’t possible when title is held as tenants by the entireties.
States allowing tenancy by the entireties title between husband and wife are Alaska, Arkansas, Delaware, Florida, Hawaii, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Wyoming and the District of Columbia.
In my opinion, a far better way for spouses to hold joint title to any real estate is in their revocable living trust to avoid probate costs and delays. A second major living-trust advantage is, if a co-owner becomes incapacitated such as with Alzheimer’s disease or a severe stroke, the successor trustee (usually the other spouse) can continue managing the property, and even sell or refinance it.
However, if title is held in joint tenancy or tenancy by the entireties, a court-appointed conservator or guardian is required to represent the incapacitated co-owner. Please ask your attorney to explain further.
WHY IS APR (ANNUAL PERCENTAGE RATE) DIFFERENT THAN MORTGAGE INTEREST RATE?
DEAR BOB: I applied for a fixed-rate mortgage. Everything is correct on the Good Faith Estimate of Borrower’s Settlement Costs form I was given. But at the closing, I was given a Truth-in-Lending Disclosure which showed the APR (annual percentage rate) is higher than my fixed mortgage interest rate. What is the relationship of these two interest rates? – Ryan H.
DEAR RYAN: The APR is almost always higher than the mortgage’s interest rate. The APR is supposed to be a true interest rate after considering up-front borrowing costs.
The reason the APR is usually higher is because it includes costs such as the loan fee, called “points,” which is usually amortized over 10 years.
To illustrate, your fixed interest mortgage rate might be 6 percent and that’s the interest rate you will actually pay. However, if you paid up-front costs, such as a loan fee, your APR might be 6.125 percent for the same mortgage. For more details, ask your loan officer to explain further.
HOW TO RESOLVE A BOUNDARY DISPUTE
DEAR BOB: Our home is located on 3.5 acres of hilly land. When we purchased about six years ago, we obtained a survey, which is part of our title insurance policy. Recently, the large property next to our property was subdivided and staked by a surveyor. He politely informed us our fence is about 12 feet on the neighbor’s side of boundary for a length of about 150 feet. The developer threatens to tear down our fence. But our survey shows the fence is on the boundary. What should we do? – Jess W.
DEAR JESS: Run, don’t walk, to the office of the title insurance company that insured your survey as part of your owner’s title insurance policy.
The title company should turn the matter over to their title attorney. He or she will probably recommend immediately obtaining a court temporary injunction to prevent the neighbor from tearing down your fence until the boundary dispute can be resolved.
The next step will probably be for you or the neighbor to bring a quiet title lawsuit to determine the true boundary location. Your title insurer should pay the costs of your defense because a loss is threatened.
Although it doesn’t happen often, surveyors do make mistakes. Thankfully, your survey accuracy is insured so if you suffer a loss of part of your property, the title insurer must compensate you.
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