What it means to have ownership interest in a property

Published Date: November 13, 2023

Modern living room overlooking the garden and swimming pool
As far as legal real estate terms go, “ownership interest” is fairly straightforward. Here’s what you need to know.

Interest = “a right to”

What does "ownership interest" mean? Ownership interest denotes the legal rights and entitlements an individual or entity possesses in a property, whether it's real estate, a business or other asset. This interest represents the stake or claim a person has in the property, granting them the privileges and responsibilities associated with ownership. In essence, someone with an ownership interest holds a portion or entirety of the rights, benefits and obligations inherent to that property. Ownership interest is different from “security interest,” which is what your mortgage lender holds. Security interest means that a party can obtain ownership interest (or take ownership) of the property only if you fail to live up to your obligations as outlined in your mortgage contract. Unlike security interest, the ownership interest is the highest possible form of interest.

What rights come with ownership interest?

No matter what type of ownership you have in a property – whether you own all or part of it – you have certain rights to that property. As a holder of ownership interest in the property, your rights include, but are not limited to:
  • The right to use the property
  • The right to dispose of or sell the property
  • The right to be compensated for property loss or damage
Keep in mind that the type of ownership interest you hold may limit the scope of these rights. For example, if you own property through joint tenancy or tenancy in common, you may not be able to sell or dispose of the home without the express permission of the other parties who share ownership interest in the home. You also can’t force them to sell the home.

What responsibilities come with ownership interest?

Responsible homeownership includes paying property taxes and utilities, funding property maintenance and upkeep, paying HOA fees (if applicable), and making sure the home is insured.

What kind of ownership interest does Pacaso offer?

Pacaso offers ownership in a second home through a property-specific LLC with a maximum of eight owners. You may own anywhere from ⅛ to ½ shared interest in a Pacaso. Your Pacaso ownership interest gives you the right to use your second home based on the amount you own. The SmartStay™ system provides an equitable way for you and the other co-owners to book stays in the home according to your ownership level. Because your co-ownership is structured through Pacaso, you are protected if another owner defaults on their ownership interest. You also have the right to sell your interest in your Pacaso at any time if all the ownership shares in your home are sold. Other co-owners also have the right to sell their interest in the property, but no one co-owner has the right to sell the entire property.Pacaso rolls your utilities, property taxes, insurance, applicable HOA dues, and maintenance fees into your monthly operating expenses, simplifying your responsibilities as a second homeowner.

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Kasey Tross

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