When buying property, such as a home or an apartment for sale, it’s important to be familiar with some of the real estate terms that are commonly used in the industry. One such term or concept is joint tenancy. What is joint tenancy?
Joint tenancy is a specific form of joint ownership where two or more parties are named on the title on a home or an apartment for sale. In most real estate transactions involving married couples, joint tenancy is the preferred form of ownership. In joint tenancy, each party (or more if named on the title) has the automatic right of ownership of the property if one of the other parties passes away. This right of ownership even precludes the right of those named on the deceased’s will to own the property. With joint tenancy, the property does not have to pass through probate either, which is a real headache saver (no lengthy court proceedings or court expenses). How is a joint tenancy created?
Two or more parties establish a joint tenancy when those parties are named on the deed as such. It’s very important that the term “joint tenants” is used, which means full rights of survivorship; otherwise, the home or the apartment for sale’s legal status could be considered as tenancy in common.
What are the differences between tenancy in common and joint tenancy?
Tenancy in common is much different than joint tenancy since the owners of a home or an apartment for sale don’t have automatic rights to ownership upon the death of one of the tenants. Tenancy in common can also divide ownership of the property in equal and unequal shares, whereas ownership in joint tenancy is equal. For instance, with a tenancy in common, one owner or tenant can hold 60% ownership while the other owner might hold only 40% ownership of the property.
When is joint tenancy usually used?
Joint tenancy is common with married couples. It’s less common or hardly ever used with friends or relatives since the property would then be automatically transferred to the co-tenant’s heir upon death, and not the other person named on the property’s deed. |
