Joint tenants and tenants in common are two of the most common types of joint property ownership in the United States. There are different regulations for joint tenants and tenants in common, and they mean different things in terms of legal rights after one of the property owner’s deaths. You should seek the advice of a lawyer if you own property with another person.
By: Brad Nakase, Attorney
What Are Tenants in Common?
Tenants in common does not provide the co-owners with survivorship rights after one of the tenants dies. In a tenants in common agreement, the tenants can buy and sell percentages of shares as they require and without consulting the other owners. If the other tenants in common want to approve the sale of shares, they should create a legal contract to that effect. Tenants in common can also mortgage their share of the property without seeking prior approval from the other tenants.
What Are Joint Tenants?
Joint tenants must have both bought their share of the property at the same time. The property deed must list both of them as joint tenants or joint tenants with the right of survivorship using those words. There is an automatic right of survivorship amongst joint tenants, meaning if one joint tenant dies, their share is passed onto the surviving joint tenants regardless of a trust or will. The joint tenants cannot change their share of the property without dissolving the joint tenancy.
How Many Joint Tenants Can You Have?
There must be at least two joint tenants, but no more than four. There are a number of legal requirements the joint tenants must meet to be eligible for this type of co-ownership. These are:
-
- Interest
- Title
- Possession
- Time
What Is the Right of Survivorship?
The right of survivorship is the most important difference between tenants in common and joint tenants. If a tenant in common dies, then their share of the property will not automatically pass to the other co-owners; the tenant in common will have to make provisions in their will. Unless their share of the property is held in a trust, their share will be subject to probate. This can cause issues if the tenant in common has left their share of the property to another person or if it passes to their spouse. The beneficiary of their share could decide to move in or mortgage or sell their share.
If a joint tenant dies, then their share will automatically go to the surviving joint tenants. Their share will not be subject to probate after their death.
Are There Other Ways of Co-Owning Property?
In California, it is possible to have a combination of tenancies. For example, you could have two joint tenants and two tenants in common owning a property. The different types of co-ownership is based on the relationship between the owning parties. For example, two siblings purchase a property together as joint tenants. They purchase their share at the same time, and the deed states that they are joint tenants. Ten years later, one of the joint tenants adds their child to the title. Because the child was not added at the time of purchase, they are a tenant in common. If the other joint owner decides to add their child later, then that child would also be a tenant in common. The original siblings will still remain joint tenants even after the tenants in common were added.
How Do Tenants in Common or Joint Tenants Affect Probate?
If someone dies in California without any estate planning or will in place, their estate will go to probate. The court will distribute it as per California probate laws.
A joint tenant does not require probate; the property will automatically go to the surviving joint tenant. The joint tenant cannot leave their share to someone else.
A tenant in common may have their share distributed as per the probate court rulings. The tenant in common can also leave their share to someone else in their will.
Alienability in a Joint Tenancy
Alienability means the ability to give, sell, or dispose of their share of the property.
If a joint tenant wanted to sell or dispose of their share of the property, they would have to dissolve the joint tenancy. They would do this by giving themselves their share of property interest as a tenant in common. Once they were a tenant in common, they can do whatever they want with their share of the property as if they were the only property owner. If there is a legally binding agreement in place amongst tenants in common, they must follow the stipulations or risk legal action for breach of contract.