Joint Property Ownership vs Tenancy in Common
Naiga Onyango
Joint-owned property is any property held in the name of two or more parties who have a reason to own property together. The property may be held in one of several legal forms, including joint tenancy, tenancy by the entirety, and tenancy in common. Each individual has equal rights and individual shares depend on individual contribution fraction or as per the agreement.
Joint tenancy ownership
Joint tenancy is a special form of ownership by two or more persons of the same property. Joint tenants share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. It creates a Right of Survivorship that if any one of the joint tenants dies, the remainder of the property is transferred to the survivors. When these individuals decide to dissolve, they mutually agree to sell the property and equally divide the proceeds of the sale of equally divide the property.
Tenancy in common
A tenancy-in-common property is owned by two or more persons at the same time. This type of ownership however can be split into different percentages among the tenants, it does not provide equal use, rights, or income. It is a less restrictive form of ownership that sometimes results when joint tenancies cease to exist or tenancy by the entirety. It does not give survivorship rights.
In the event of death, the decedent’s share is acquired by their heirs, who then enter into the tenancy-in-common agreement with the other surviving owners. If the partners want to dissolve, they will acquire only their respective portion.
Joint tenancy versus joint in common
In joint tenancy, the partners have the same undivided interest which they own equally and it has survivorship right. Joint in common, individuals may have unequal ownership and has no survivorship right.
Why Joint Ownership
It is easier to pool resources to buy property as partners, especially with high-interest rates charged on loans.
Easy transfer of a house or land among spouses, as they can nominate their children as future owners of the property.
Disadvantages of joint ownership
If you transfer your home into a joint tenancy, you may lose the principal residence exemption for that portion transferred into the name of the other person.
Property held in joint tenancy is subject to any adverse circumstances affecting the other party, for instance, a family law claim, a serious accident for which they are liable, or a judgment against them.
