Science Fair Project Encyclopedia
Co-tenancy or joint tenancy is a concept in property law, particularly derived from the common law of real property, which describes the various ways in which property can be owned by more than one person at a given time. The parties who own property jointly are referred to as co-tenants or joint tenants. There are three kinds of joint ownership: tenancy in common, joint tenancy with right of survivorship, and tenancy by the entirety. Some states treat the phrase joint tenancy as synonymous with a tenancy in common.
The type of ownership determines the rights of the parties to convey their interest in the property to others, to will the property to their heirs, or to sever their joint ownership of the property. Just as each of these affords a different set of rights and responsibilities to the joint owners of property, each requires a different set of conditions in order to exist.
Tenancy in common
Tenancy in common is the default form of joint ownership, in which each of owner, referred to as one of the tenants in common, is regarded by the law as each owning separate and distinct shares which may differ in size. This form of ownership is common where the co-owners are not married or have contributed different amounts to the acquisition of the property. Also, if joint owners had attempted to use another form of joint ownership such as a joint tenancy with right of survivorship or a tenancy by the entirety, and the effort was for some reason invalid, the joint owners would then be tenants in common. If conclusive evidence is not available of the desire to create a tenancy with rights of survivorship or a tenancy by the entirety, courts will determine that a tenancy in common has in fact been created.
Tenants in common have no right of survivorship, meaning that if one owner dies, that owner's interest in the property will pass by inheritance to that owner's heirs, either by will, or by intestate succession. Each tenant in common has unrestricted rights of access to the property. Each tenant can petition for and secure a partition of the property at any time, meaning that a court will physically divide it between the joint owners, leaving each with ownership of a portion of the property representing their share.
Joint tenancy with right of survivorship
A joint tenancy with right of survivorship or JTWROS is a type of joint ownership in which the joint owners have a right of survivorship, meaning that if one owner dies, that owner's interest in the property will automatically pass to the remaining owner or owners. On the death of one of the tenants, the whole of the property passes to remaining tenant(s); this is the "right of survivorship." The deceased tenant's property interest simply evaporates by operation of law, and cannot be inherited by his heirs (which means it avoids going through probate). Under this type of ownership, the last owner living takes all.
It is important to note, however, that creditors' claims against the deceased tenant's estate may, under certain circumstances, be satisfied by the portion of ownership previously owned by the deceased, but now owned by the survivor or survivors. In other words, the deceased's liabilities can sometimes remain attached to the property.
This form of ownership is common between husband and wife, and parent and child, and in any other situation where parties want absolute ownership to immediately pass to the survivor. For bank and brokerage accounts held in this fashion, the acronym JTWROS is commonly appended to the account name as evidence of the owners' intent.
In order to create this type joint ownership, the party or parties seeking to create it must use specific language indicating that intent. For example, if Joey wishes to convey property for Kelly and Lisa to share as joint tenants with right of survivorship, Joey must state in the deed that the property is being conveyed "to Kelly and Lisa as joint tenants with right of survivorship, and not as tenants in common."
The four unities
In order for a JTWROS to be created, the co-owners must share the "four unities":
- Time = the property interest must be acquired by both tenants at the same time.
- Title = both tenants must have the same title to the property in the deed - if the deed places a condition on one tenant and not the other, they do not have the same title, and the attempt to create a JTWROS is invalid.
- Interest = both tenants must have the same interest in the property - e.g. three owners each having a 1/3 interest.
- Possession = both tenants must have the right to possess the whole property - if one owner can prove that he or she has been improperly excluded from the property by the other, the JTWROS will be invalidated.
If any one of the four unities is missing, the JTWROS is invalid, and becomes a tenancy in common.
Breaking a JTWROS
The co-tenant in property owned by a JTWROS can break the JTWROS as to their interest in the property at any time by conveying their interest in the property to another person. Under the old common law, this required an actual exchange with a straw man - another person who would buy the property from the co-tenant for some nominal consideration, then sell it back to the co-tenant at the same low price. Many states now permit a joint tenant to break the JTWROS simply by executing a document to that effect - even if that owner does not inform the other owners. In either case, the JTWROS will, again, revert to a tenancy in common as to that owner's interest in the property.
It is important to note, however, that if there are three or more owners, and only one of the owners breaks the JTWROS, the other owners remain in the JTWROS as to each other. For example, if Joey, Kelly, and Lisa own a piece of property as joint tenants with right of survivorship, but then Joey conveys his share in the property to Ryan. If Ryan dies, his 1/3 share will go to his heirs. But if Kelly dies, her 1/3 share will go to Lisa, because they still owned their total 2/3 share in JTWROS.
Tenancy by the entirety
Tenancy by the entirety is a type of joint ownership available only to married couples, wherein ownership of the property is treated as though the husband and wife are a single legal person. Like a JTWROS, the tenancy by the entirety also encompasses a right of survivorship, so if one spouse dies, the entire interest in the property passes to the surviving spouse, without going through probate.
In order for a tenancy by the entirety to be created, the party or parties seeking to create it must specify in the deed that the property is being conveyed to the couple "as tenants by the entirety". Also, the parties must share the four unities necessary to create a joint tenancy with right of survivorship - time, title, interest, and possession - plus a fifth unity, marriage. However, unlike a JTWROS, neither party in a tenancy by the entirety has a unilateral right to sever the tenancy by the entirety - if it is to be undone, or if any part of the property is to be conveyed to another person, this must be carried out by both husband and wife. A divorce breaks the unity of marriage, leaving the default tenancy – a tenancy in common.
Note that every country and every state in the United States has at least minor variations on the law as applied to joint ownership of property. These links generally discuss the law as applied in the state from which they originate:
- Massachusetts Association of Realtors page on Co-Ownership of Real Property
- Illinois Real Estate Tenancies
This outline discusses the general common law of joint ownership of property:
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