Joint tenancy is a type of property ownership where two or more co-owners share equal ownership. In some cases, one owner might have a situation where they need to leave the joint tenancy arrangement. The ability to do so depends on the terms of the agreement and the consent of the other co-owners.
Conditions of Joint Tenancy
To establish joint tenancy, regardless of how many co-owners, there are four conditions, or “unities,” that must be met.
- Unity of Interest: All co-owners must have an equal and undivided interest in the property. The shares are identical and cannot be divided into smaller portions.
- Unity of Time: All joint tenants acquire ownership at the same time to ensure no joint tenant can be added or removed without the consent of all co-owners.
- Unity of Title: All co-owners should squire ownership through the same deed or legal instrument.
- Unity of Possession: Each tenant has equal right to possess and use the entire property.
Joint tenancy is when co-owners hold equal and undivided interest in a real estate property. All co-owners have equal rights to possess and use the entire property. For example, if there are three tenants, each would hold one-third interest.
In joint tenancy, there is a right of survivorship. If one joint tenant passes away, their share automatically transfers to the surviving joint tenants and not to an heir. Joint tenancy differs from Tenancy in Common, where two or more individuals hold ownership rights to a property, but their shares can be unequal. In addition, there is no right of survivorship and each tenant can freely sell or transfer their share without the consent of the other co-owners.
Terminating Joint Tenancy
In most cases, if one party wants to leave or amend the joint tenancy arrangement, all joint tenants must consent to the changes. The requirements to sever an arrangement vary by location, but some options might include:
- Selling the share to the other co-owners of the property.
- An agreement of all joint tenants to terminate the joint tenancy. In some states, this can be an oral agreement.
- A lawsuit forcing the termination of the joint tenancy, or a partition judgment.
- Divorce or probate decisions.
- A creditor obtaining a writ of execution to collect a debt.
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.
Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.
