Real Estate Joint Tenancy Vs Tenants In Common
When two or more individuals own a property together, they can choose to hold title through a joint tenancy or tenants in common. Both setups have their benefits and drawbacks, so it’s important to understand the differences before making a final decision.
Joint Tenancy
Joint tenancy is a type of ownership where all individuals own the property equally. If one owner passes away, their share automatically transfers to the surviving owner(s). This is called the right of survivorship.
One benefit of joint tenancy is that it’s an easy way to transfer property upon death. The surviving owner(s) don’t have to go through probate court to take ownership of the property. It also ensures that the property won’t end up in the hands of someone the deceased owner didn’t want to have it.
However, there are some drawbacks to joint tenancy. Each owner has the right to sell or transfer their share without the other owner(s)’ consent, which can create problems if one owner wants to sell but the others don’t. Additionally, if one owner gets sued or goes into debt, the property could be at risk.
Tenants in Common
Tenants in common is another type of ownership where each individual owns a specific percentage of the property. This percentage can be equal or unequal.
If one owner passes away, their share of the property goes to their heirs, not to the other owner(s). This means that the surviving owner(s) don’t automatically gain ownership of the deceased owner’s share.
One benefit of tenants in common is that each owner has more control over their share. They can sell or transfer their percentage without the consent of the other owner(s). Additionally, each owner’s share is protected from creditors, so the property is less likely to be at risk if one owner gets sued or goes into debt.
However, tenants in common can also cause problems if one owner wants to sell but the others don’t. It can also be difficult to determine who has the right to use certain parts of the property, such as a shared driveway or yard.
Choosing Between Joint Tenancy and Tenants in Common
Deciding between joint tenancy and tenants in common depends on your individual situation and goals. If you want to ensure that the property passes to the surviving owner(s) without going through probate court, joint tenancy may be the better option. If you want more control over your share of the property and protection from creditors, tenants in common may be the better option.
It’s also important to consider the relationship between the co-owners. Joint tenancy may be a better option for spouses or family members who trust each other and have a good relationship. Tenants in common may be a better option for friends or business partners who want more control over their share of the property.
Conclusion
Joint tenancy and tenants in common are both ways to own property with others. Joint tenancy offers the right of survivorship but can create problems if one owner wants to sell or gets into debt. Tenants in common offers more control over each owner’s share but can create problems if one owner wants to sell or it’s difficult to determine who has the right to use certain parts of the property.
Ultimately, the choice between joint tenancy and tenants in common depends on your individual situation and goals. Consider the relationship between the co-owners and the level of control each owner wants over their share of the property.