The Very Least You Need To Know About Joint Tenancy

By on June 10, 2017

A lot of people don’t even realize that they are in a joint tenancy with their spouse in regards to ownership of their homes.

They do know that when 1 party passes away, the survivor inherits the ownership of the shares of the deceased. However, they have no idea that the ownership structure is one of joint tenancy.

Wills have no impact on joint tenancy. So some people list heirs to a house in their will not knowing that it will not be legally binding. A surviving owner simply takes over the shares of ownership.

4 unities

It is essential for 4 unities to be present for a joint tenancy to be created:

  1. Time
  2. Title
  3. Interest
  4. Posession

The absence of any of the above can result in legal challenges.

Unity of time

Each party must acquire the ownership at the same moment in time. This means that once 2 parties decide to create a joint tenancy, a third party cannot enter into the ownership.

In order to insert a new joint tenant, an entirely new joint tenancy has to be created that include the new and old owners.

There are grave implication in this if you are an investor who often does business with partners.

For example, if 3 individuals (including you) enter into a joint tenancy over a piece of property, if you sell your share to a new person, this new entrant does not automatically become a joint tenant.

In effect, this new owner become a tenant in common while the 2 remaining owners remain as joint tenants. And this will remain so unless a new joint tenancy is agreed and signed upon by all parties, creating a new joint tenancy.

Unity of title

This means that all parties must have acquired their interest in the property from the same source.

Unity of interest

Unlike tenancy in common, joint tenancy requires that each party has exactly the same amount of interest in the property in question.

Should a party insist on having more interest allocated in his favor, then this lack of unity will drive the ownership to a tenants in common.

Unity of possession

Similar to tenants in common, unity of possession requires all co-owners to have the undivided possession of the property.

No one person can claim to fully own a portion of the real estate. Ever acre and square feet will be equally owned by all co-owners.

The right of survivorship

This is the most widely recognized and understood feature of joint tenancy ownership structures. It basically means that upon the death of a joint tenant, the surviving owner automatically takes over ownership of the shares.

The death of a partner between married couples makes the remaining spouse the sole owner. This remove the possibility of any probate processes.

If there are more than 2 joint tenants, the remaining owners will automatically take over the shares in equal portions. Meaning upon the death of a 5-party joint tenancy, the remaining 4 owners will have their interest rise from 20% to 25%.

Other features

Because of a general assumption that many homeowners have about the ownership of their homes automatically transferred to the surviving spouse, a joint tenancy is often termed as the poor man’s will.

Also, because of the unique setup of ownership, should a husband purchase a house with a lover as joint tenants, upon his death, his stake in that house will go to the lover. His surviving wife will have no dower or curtesy rights on that property.

Finally, the most interesting feature of joint tenancy is that should a co-owner be knee-deep in debt, upon his death, creditors cannot seize a property as payment because the surviving party becomes the sole owner and is not liable for the partner’s debt.



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