Tenants in Common Vs. Jointly Held
When more than one person takes title to real property, they must determine how they will share title. There are significant differences between tenancy in common and joint tenancy. The deed must specify how title will be held by the owners.
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The Deed
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A deed is the document that transfers ownership of real estate. It states the names of the old and the new owners and contains a written description of the property. In addition, if more than one person is taking title, the deed will specify how title will be held by them and whether there will be rights of survivorship.
Tenants in Common
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One way that two or more people can own real estate together is as tenants in common. Tenants in common can hold property in any proportion, either equal or unequal shares. They can sell their interests and, upon death, each owner's interest passes to his heirs or beneficiaries. In many states, if two unmarried people own property and the deed does not specify otherwise, they are presumed to own property as tenants in common.
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Joint Tenants
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Usually, joint tenants must own property in equal interest shares. For example, two people would each own one-half; three people would each own one-third. In some states, when one joint tenant dies, her interest automatically passes to the other owners, but some states require that the deed specify rights of survivorship.
Right of Survivorship
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If joint tenants have rights of survivorship, when one dies, the survivor automatically owns the deceased owner's interest in the property. With rights of survivorship, a will is not required to transfer the property. The property passes automatically, outside the will.
Tenancy by the Entirety or Community Property
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Tenancy in the entirety is a special form of joint tenancy when the joint tenants are married. Neither spouse can sell the property without the consent of the other. In certain states, married couples may also take title as community property.
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References
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