The Legality behind Your New Home Purchase

Posted by under Buying a Home


The home buying experience can be overwhelming and exhausting, but the moment you sign your name on the deed/title, you know it would have all been worth it. However, there is a mountain of legal paperwork that awaits your review, so take the time to speak to a real estate lawyer to fully understand what exactly you are signing for.

Types of home ownership

What exactly do you own? If you are purchasing a property by yourself, then you are the sole possessor of that home. However, the moment co-ownership is involved, such as a purchasing with a spouse or friend, then there are two types of ownership arrangements that need to be considered.

Joint Tenancy is where the ownership of the home is equally shared. This is quite common amongst married couples. In the event that one partner should die, their interest in the home would be transferred to the surviving party member — also known as the right of survivorship. Some refer to join tenancy as the ‘last man standing.’

Tenancy in Common conveys no right of survivorship. In this arrangement, a portion of ownership is assigned between each party member, and thus each individual (and their estate) owns a portion of the title. Unlike joint tenancy ownership, there is no right of survivorship. So when a partner dies, ownership of the home is transferred to the estate of the deceased.

The official document that you and your partner will have to sign is called the Title Transfer which will outline the type of co-ownership (joint tenancy or tenants in common) and the names attached to the home in the event that ownership of the home is transferred to someone else.

Aside from the title transfer document, there are two other legal documents that will require your autograph. Acknowledgements and directions are documents that represent your written confirmation of your instructions to be used by your lawyer. An acknowledgement confirms that you have reviewed all necessary paperwork and that the information cited is correct. A direction states that you have given permission to your lawyer to act on your behalf. A real estate lawyer may also require that your review and sign a direction for the transfer of funds from your bank, to be held by him/her until the amount is paid to person selling the you the house.

These documents are necessary paperwork you will need to read and sign; however, there may be more depending on the type of home you purchase and the circumstances of the sale.

Comparing the lowest mortgage rates and house-hunting is only a portion of the home-buying process. Reviewing and understanding the ownership arrangements and the legal documents is crucial to protect yourself from ownership disputes and other possible legal trouble.


About the Contributor is an independent, impartial website that compares mortgage rates. RateHub also focuses on delivering clear, easy-to-understand mortgage education and robust mortgage calculators.

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