Community Property
Definition
Community property is a form of ownership recognized in certain states where property acquired during marriage is considered equally owned by both spouses, regardless of who earned the money or whose name is on the title.
Example
A couple lives in California (a community property state). The husband buys a rental property during the marriage using his salary. Even though only his name is on the deed, the property is community property and the wife owns a 50% interest. However, a house the wife inherited from her parents remains her separate property.
Exam Tip
Know the community property states (memorize: AZ, CA, ID, LA, NV, NM, TX, WA, WI). Property acquired DURING marriage with marital funds = community property. Property owned BEFORE marriage, inherited, or gifted = separate property. Each spouse can will their 50% share—there is no right of survivorship.
Related Ownership Terms
Real Property vs. Personal Property
Real property is immovable land and anything permanently attached to it, while personal property (also called chattels) is movable.
Joint Tenancy
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
Tenancy in Common
Tenancy in common is a form of co-ownership in which two or more persons hold separate, undivided interests in property without the right of survivorship. Each owner can hold unequal shares and can independently transfer their interest.
Tenancy by the Entirety
Tenancy by the entirety is a form of co-ownership available only to married couples that includes the right of survivorship and protection from individual creditors. Neither spouse can unilaterally sell or encumber the property.
Condominium Ownership
Condominium ownership involves owning a unit of airspace within a multi-unit building plus an undivided interest in the common elements shared with other unit owners. Each unit is separately taxed and financed.
Cooperative Ownership
In a cooperative (co-op), the building is owned by a corporation, and residents purchase shares of stock in the corporation that entitle them to a proprietary lease on a specific unit. Residents are shareholders, not property owners.
Frequently Asked Questions
Test Your Ownership Knowledge
Practice with exam-style questions to make sure you can apply Community Property and other ownership concepts.