Community Property
Definition and meaning of Community Property in real estate.
Community property is a legal classification in certain states where all assets acquired by either spouse during a marriage are owned equally by both partners.
In more detail
This system is used in a minority of U.S. states, mostly in the West and Southwest, and contrasts with common law property states where ownership depends on whose name is on the title. In a community property state, both spouses own an equal share of any real estate purchased during the marriage, regardless of who paid for it or whose name is on the deed.
When selling or refinancing a home, both partners must sign the transaction documents. In the event of a divorce, community assets are generally split equally, while separate property remains with the original owner. Buyers who are married should consult a real estate attorney to understand how these state laws impact their vesting options.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Varies by state | Applies only in specific states, such as California, Texas, and Arizona |
| Spousal ownership | Equal joint ownership of all assets acquired during marriage |
| Exclusions | Inheritances, gifts, and property acquired before the marriage are usually separate |
A married couple buys a house in Arizona, a community property state, meaning both spouses own equal shares of the home even though only one spouse's income paid for it.
Frequently asked questions
Can community property be sold by only one spouse?
No, in community property states, both spouses must consent and sign the transfer documents to sell or mortgage community real estate.
What happens to community property when a spouse dies?
Typically, the deceased spouse can pass their share to heirs through a will, though some states offer community property with right of survivorship to automatically transfer it to the surviving spouse.
Related terms
Sources & references
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