How Does Buying Property Work?
The question “Who owns the property?” may have a simple answer: whoever owns the property. But in practical terms, it is very tricky to understand who owns a particular property. After all, it is difficult to prove that a certain person owns a certain property without actually seeing or touching the property itself. In fact, one very important condition that the courts have set forth in order to determine who owns the property is that it should be proved that the person did in fact personally occupy the property at some time during the relevant time frame.
Property ownership in the real world is often thought to be a straightforward matter of identifying whose property it is and crossing their hands to sign over the deed. In this way, the owner can legally avoid debts owed to others by simply transferring the property to his or her relative or friend. Property ownership in the abstract, however, is a lot more difficult to prove, even with the best of intentions. For instance, if two neighbors were to develop a rental housing project and each tenant was going to occupy a portion of the property, it would be extremely difficult to prove that either tenant had in fact developed the property and should therefore be held liable for the debts of the other tenant. This demonstrates how difficult it can be to prove property ownership with respect to abstract property.
One way to overcome this difficulty is to prove that the individual who actually owns the property actually intended to own it. This can be done in a number of ways, including showing that a change in ownership was made to correct any defects that existed before the transfer was completed, or by showing that the individual had taken reasonable steps to maintain the property and fix problems that contributed to its deterioration in quality. However, there are situations where this evidence may not be enough to establish ownership. For instance, if the individual lived in the property as a tenant for many years, it may be difficult for the court to determine that he actually owned it, especially if he never had any dealings with the property beyond the rental arrangement.
Another way to establish ownership is through a transaction known as a Deed of Trust. Here, an individual (typically the person who bought the property) creates a binding contract that names another person as the trustee of the property. The individual then makes payments of money to the trustee on behalf of the buyer. Over time, the individual’s property becomes free and clear because the money is steadily increasing until the entire amount is placed in an escrow account. If at any point the funds in the account are less than the balance, the money in the escrow account is applied to paying off the debt.
A Deed of Trust does not have to name the person as the legal owner of the property, although this is often done. Instead, the document requires that it be held in trust for the benefit of all beneficiaries of the contract. Therefore, it is used much like a will. Only people who benefit from the property can legally remove their names from the deed.
Many people may feel hesitant about investing in property due to uncertainty about its future value. In most cases, the value of real property does not change very much over time. It is possible, though, that the value of a particular piece of property does decrease if there are a lot of renovations or new developments in an area. However, most investors are not concerned with the short-term potential of the value of their property. They want to make sure that they can sell the property when they are ready to do so. For this reason, individuals interested in purchasing property should ask themselves what their plans are for the property, especially in the years to come.