Joint Tenancy Ownership
In this post, we’ll be taking a closer look at joint tenancy.
Joint tenancy is one of the ways you can hold title to real estate property. We previously discussed the different ways you can hold title HERE. Remember that the term “holding title” means to legally own something. Let’s get started with our discussion of joint tenancy!
Joint tenancy is when two or more individuals hold title to real property jointly and in equal shares. The joint tenants have “rights of survivorship,” which means that upon the death of one of the tenants, their rights of ownership will automatically pass to the remaining joint tenants. For example, let’s say that Alan and Betty own some farmland in joint tenancy. If Alan passes away first, all of his interest in the property will automatically pass to Betty upon his death.
The creation of a joint tenancy also requires four elements, also called the “four unities.” These four unites are time, title, interest, and possession. Let’s break these down.
Time: This element requires that each owner takes title to the property at the same time. If Owen originally owned the farm and first conveyed one-half of his interest to Alan and then a week later conveyed his remaining one-half to Betty, then Alan and Betty would not own in joint tenancy. In that instance, Alan and Betty would own as tenants in common.
Title: This element requires that each owner takes title to the property by the same document, for example a deed or a will. So, if our original owner Owen used one deed to convey one-half of his interest to Alan and another deed to convey his remaining one-half interest to Betty, intending for them to own in joint tenancy, Alan and Betty still would not own in joint tenancy. They would only own as tenants in common, since they did not acquire their interests by the same deed.
Interest: This element requires that each owner owns in the property equally. If Owen conveyed his interest to Alan and Betty as joint tenants using the same deed, but stated that Alan was to own 30% and Betty was to own 70%, then Alan and Betty still would not own in joint tenancy. Because their shares in the farm were not equal, they would only own as tenants in common.
Possession: This element requires that each owner has the right to possess and enjoy the entire physical property. If Owen conveyed his interest to Alan and Betty in equal shares as joint tenants using the same deed, but limits Alan’s use of the farm to the west half and Betty’s to the east half, then Alan and Betty would only own as tenants in common. By limiting which half of the farm Alan and Betty can use, they each do not possess the entire farm.
Even when all four unites are met and an interest is held in joint tenancy, this joint tenancy can still be broken if one owner decides to sell their interest. In this example, Alan, Betty, and Charlotte, own equal 1/3 shares in the farm as joint tenants. Charlotte decides to sell her interest to Daniel. Because Daniel acquired his interest by a different deed at a different time, he is not a joint tenant and will instead own as a tenant in common. Alan and Betty, however, still remain joint tenants as to their 2/3 interest in the farm. As to the entire farm, Alan and Betty would now be tenants in common with Daniel, who owns the remaining 1/3 interest.