Real Estate in California: Understanding Ownership

Owning real estate in California comes with a unique set of rights and considerations. The state’s laws recognize the diverse nature of property ownership, allowing a wide range of individuals and entities to hold and dispose of real estate. Whether you’re a citizen, a corporation, or even a prisoner, California grants you the opportunity to partake in property ownership. However, certain restrictions apply to minors and those lacking the capacity to engage in legal contracts, requiring real estate transactions to be conducted on their behalf by guardians or conservators. In this article, we will explore the meaning of property ownership in California, focusing on the “bundle of rights” possessed by property owners and the various types of ownership structures available.

Bundle of Rights

A property owner in California enjoys a number of rights collectively known as the “bundle of rights.” These five rights associated with owning real property are: (1) possession; (2) control; (3) exclusion; (4) enjoyment and (5) disposition. This bundle ensures that property owners have the authority to occupy and use their property, control its activities, exclude others from trespassing, derive benefits from its use, and transfer or sell the property as desired.

Fee Simple

Unless stated otherwise on the property’s deed, individuals in California own property in what is referred to as “fee simple.” This grants the owner full rights over the property, including the land itself and related privileges such as water rights, the right to extract oil, gas, and minerals, airspace usage over the land, standing timber, unharvested crops, fixtures, and easements. Essentially, owning property as a fee simple interest provides individuals with the utmost control and dominion over their real estate holdings.

Ownership Structures

California offers different methods of holding a fee simple interest in property. One common approach is sole ownership, where an individual possesses full ownership and control of the property. Another option is co-tenancy, which designates ownership by several persons sharing undivided interests in the property, distinguishing itself from separate parcel ownership, where individuals possess distinct portions of land.

Co-Tenancy Types

There are four types of co-tenancy in California:

• joint tenancies
• community property
• tenancies in partnership
• tenancies in common

A joint tenancy involves undivided ownership shared equally among two or more individuals. The critical feature of a joint tenancy is that there is a right of survivorship. This means when one of the owners passes away, the entire estate automatically belongs to the surviving joint tenant(s).

Community property, on the other hand, refers to property acquired by a married couple during their marriage. Spouses can hold title to property as joint tenants, tenants-in-common, or as community property with the right of survivorship.

Tenancies-in-partnership is a property acquired and owned by a partnership rather than the individual partners. In this case, partners are not considered co-owners of the property and have no interest in the partnership property which can be voluntarily or involuntarily transferred.

Lastly, tenancies-in-common is a form of ownership that serves as a catch-all category for ownership structures that do not fall under the other types. Unlike joint-tenancy ownership, each tenant in common holds a distinct share of the property and can sell or transfer it to a third party. Additionally, tenancies-in-common can be devised to heirs through wills or trusts.

Owning Real Estate in California

Owning property in California offers individuals and entities myriad opportunities and responsibilities. Whether you’re a sole owner, a joint tenant, or part of a partnership, California’s property laws empower individuals to make the most of their real estate investments based on the “bundle of rights” and ownership structures available. 

Kendall Law helps property owners navigate the legal landscape of ownership rights with confidence. Contact the team at Kendall Law today or call 310-619-4941 to schedule a consultation.