When buying a home, you may see some new and unfamiliar terms. Whether you are a single person, married couple, or an entire family buying a property, you need to understand the impact of these terms. Phrases such as tenancy by the entirety, joint tenants, and tenants in common can have a significant impact on what happens to your property.
At Kondori & Moorad, LLP, our experienced real estate attorneys explain these terms and how they impact your real estate transactions. We can help you decide which option works best for your situation.
TENANCY BY THE ENTIRETY
Tenancy by the entirety occurs when a married couple takes joint ownership of real estate together. In many states, tenancy by the entirety is presumed if a married couple purchases a piece of property. It may not require that specific legal language be in the deed for this to occur.
If real estate is held in this way, each spouse has survivorship rights over the property. This effectively means that the surviving spouse automatically owns the entire property when their spouse passes away. This avoids the need to establish this ownership right in probate.
JOINT TENANTS
Joint tenants are two or more people who own property together. Each person has an undivided equal interest in the real estate. This means that each owner can utilize the entire property as their own, as each enjoys full ownership rights of the property.
Joint tenants have a right of survivorship upon the death of another owner. This means the joint tenant’s portion of the property will transfer in equal part to the other owners without the need to go through probate. Most states require that the deed or transfer instrument specifically mention a joint tenancy to create one. Otherwise, a tenancy in common is likely presumed.
A joint tenancy may be broken if one joint tenant sells or transfers their interest in the property. Depending on the circumstances, and specific state law, one owner’s choice to sell their interest could break the joint tenancy, causing a tenancy in common. This is a highly nuanced situation that your real estate lawyer can analyze for you.
TENANTS IN COMMON
Tenants in common are individuals who own property together with an undivided interest in that property. Each has an equal use to the entire property. A tenancy in common is often presumed if real estate is transferred to two or more people and the deed does not specify another form of ownership. However, this varies from state to state.
Tenants in common have a great deal of flexibility to transfer or sell their respective ownership interests in the property. Owners can transfer their interest to others or will it to their beneficiaries upon their death.
There are no rights of survivorship with tenants in common. This means that a decedent’s share does not automatically pass to the other property owners, but transfers according to a person’s will or state intestacy laws. The remaining owners are only entitled to their fractional share of the property.
WHICH OPTION IS BEST FOR ME?
Understanding which ownership option is best for you will ultimately depend on your unique circumstances. A skilled real estate attorney will consider many factors in helping you choose the right option. These factors include, but are not limited to:
- Whether you are currently married
- Whether you will marry soon in the future
- Whether you want your interest to transfer automatically to the other owners
- Whether you own the property as a residence or for a business venture
- What options are available in your state
You do not have to know what option is best for you on your own. We can help you make the right choice.
PURCHASE REAL ESTATE WITH CONFIDENCE
At the law firm of Kondori & Moorad, we can help pick the right ownership option for you. Our real estate attorneys can explain your options and guide you through the process. Contact us today to get started.