One of the basic concepts of real estate law in the U.S. is that of concurrent ownership. Real property may be owned by a single owner, or it may be owned by more than one owner. When a single owner acquires real property, this is known as ownership in severalty. When two or more persons own a piece of real estate, it is called concurrent ownership.
In Practical Real Estate Law, author Daniel F. Hinkel explains that the four types of concurrent ownership that are recognized under U.S. law are:
- Joint tenancy with the right of survivorship,
- Tenancy in common,
- Tenancy by the entirety, and
- Community property.
Hinkel notes that not all types of concurrent ownership exist in all U.S. states. The law of the state in which the real estate is located will determine how the concurrent ownership is held.
Joint Tenancy with the Right of Survivorship
Joint tenancy with the right of survivorship is recognized in most American jurisdictions. As Hinkel explains, “Joint tenants with the right of survivorship own equal interest in the real property, and on the death of any owner, the deceased owner’s interest in the real property will pass to the surviving owner.”
Joint tenancy with the right of survivorship may be created created by either a deed or a will. Most states require that the conveying instrument contain express language specifying that the owners take the real property as “joint tenants with the right of survivorship,” or similar words. Without the specific language, the conveyance will create a tenancy in common.
Tenancy in Common
The tenancy in common is a form of concurrent ownership in which two or more people are each entitled to possess the same property. One major difference between the tenancy in common and the joint tenancy with the right of survivorship is that, with respect to the tenancy in common, there is no right of survivorship. Each owner’s interest in the property will pass by will or by inheritance when the common owner dies.
Another big difference between the tenancy in common and the joint tenancy with the right of survivorship is that the owners may hold unequal shares in the property. Thus, for example, one party may own one-quarter interest in the property while the other party owns the remaining three-quarters interest.
Tenancy by the Entirety
The third type of concurrent ownership in real property is the tenancy by the entirety. Hinkle notes that this is a form of concurrent ownership between a husband and wife. It is similar to the joint tenancy with the right of survivorship in that one spouse’s interest in the property passes by operation of law to the other spouse upon death.
In the states that recognize the tenancy by the entirety, a conveyance of real property to a husband and wife automatically creates a tenancy by the entirety, unless the conveying instrument specifies otherwise. Divorce will convert the tenancy by the entirety into a tenancy in common.
Community Property
A minority of American states recognize community property, which holds that, as a general rule, all property acquired by the parties during the marriage, either jointly or individually, is community property. Community property is owned equally by the husband and wife and cannot be conveyed by either spouse without the other spouse’s consent.
Property that is not part of the community property is separate property. Hinkle explains that separate property includes:
- Property owned by either spouse before marriage; and
- Property acquired by either spouse during the marriage, if it is acquired by gift, inheritance, bequest or devise.
Concurrent Owner’s Rights
Not all types of concurrent ownership are available in all states. A joint owner’s rights will depend on factors such as where the property is located and how it was conveyed. Anyone with questions about their rights as a concurrent owner of real estate should contact a licensed real estate attorney in their local area.
Source:
Daniel F. Hinkel, Practical Real Estate Law (6th ed., Cengage 2011).
Jessie Vanwinkle - Jessie Vanwinkle is an attorney in practice since 1998. View her full profile for more information.
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