If more than one person is buying or renting property, it is highly likely that your lawyer will discuss whether you want to share ownership as Joint Tenants or Tenants in Common.
Joint Tenancy and Tenancy in Common are two common forms of property ownership, each with distinct characteristics. The following are some differences (s) between the two:
What Happens When One Co-Owner Dies?:
Joint Tenancy: Each Joint Tenant holds the property collectively, and when one Joint Tenant dies, their interest in the property automatically goes to the surviving Joint Tenant(s). At the time of the Joint Tenant's death, the surviving Joint Tenant(s) will be required to make an application to Note the Death of the Deceased Joint Tenant on the Certificate of Title. In this instance, there are no estate duties to be paid.
Tenancy in Common: Ownership shares can differ in how they are distributed, and when an owner passes away, their portion typically transfers to their heirs through a Will or following intestate succession laws. Consequently, Estate Administration procedures must be carried out to treat with the deceased's shares in the property for which estate duties may be incurred.
Ownership Structure:
Joint Tenancy: In joint tenancy, all co-owners (often referred to as joint tenants) have an equal and undivided ownership interest in the property. This means that each joint tenant owns an equal share.
Tenancy in Common: Tenancy in common allows co-owners (often called tenants in common) to hold unequal ownership shares in a property. Each tenant in common can own a different percentage of the property.
Transferability:
Joint Tenancy: Joint tenants cannot freely transfer their ownership interest to someone else without breaking the joint tenancy. If one joint tenant wants to sell or transfer their share, it usually converts the ownership structure to a tenancy in common (breaks the Joint Tenancy).
Tenancy in Common: Tenants in common can freely transfer or sell their ownership interest without affecting the ownership structure. This flexibility makes it easier for tenants in common to transfer their share to others.
Consent for Transactions:
Joint Tenancy: Joint Tenants generally need the unanimous consent of all co-owners to make major decisions about the property, such as selling it or taking out a mortgage.
Tenancy in Common: Tenants in Common can often make decisions independently or with the agreement of only a portion of the co-owners, depending on the specific arrangements outlined in their co-ownership agreement.
The foregoing information is intended for general informational purposes only and does not constitute legal advice.
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