Are you a tenant or a potential one looking to get a clear idea beforehand? Well, you do not need a civil attorney for that. Neither do you need to get a real estate license to understand the contents of joint tenant vs tenancy in common?

There are different ways to own a property. You may own it with someone else or alone. Two common ways of ownership are joint tenancy and tenancy in common.

Each has its own advantages and drawbacks. It truly depends on what you need and your situation.

People might pick joint tenancy or tenancy in common if they are married, living together, have a family, or are partners in business. However, knowing the pros and cons of each can help you decide which ownership type suits you best.

Thus, in this article, we will discuss them for you. Additionally, we will shed light on the following.

• What is tenants in common vs joint tenancy, and the difference.
• How to remember joint tenancy vs tenancy in common differences.
• Methods of termination of both.
• Which one is the best choice for you.

What Is Joint Tenancy?

Now, we try a simple breakdown of each element in joint tenancy vs tenancy in common. Let’s start with joint tenancy.

Joint tenancy is a type of property ownership. Here, two or more people buy a property together.

Therefore, since there is joint ownership, they hold equal interest and rights in the property.

• A joint tenancy is common for married couples. However, for it to be joint tenancy, there are four necessary requisites.
• All buyers get the property at the same time.
• Each person has an equal share in the property.
• Everyone has an equal share in the ownership deed together.
• Everyone holds equal rights in decisions about the property. These rights may be the right to sell it, maintain it, and divide the profits from it.

What Are The Benefits of Joint Tenancy?

When learning about joint tenancy vs tenancy in common, the benefits will be of much help. By comparing the benefits of one with the other, you can arrive at your decision.  

So, the advantages of joint tenancy may include the following,

It allows for the automatic transfer of ownership if one of the co-owners passe away.

For instance, if Bob and Cindy jointly own property and Bob dies. Here, Cindy will automatically become the sole owner of the property. Additionally, they will not even have to go through the probate process.  

Moreover, the owners may not even be able to transfer taxes.

Unmarried joint owners may also not need to go through the probate process. They have the option to treat the inherited property as a gift.

This automatic transfer is what we legally call the right of survivorship. It ensures equal rights and ownership for all parties in a joint tenancy.

What Is Tenancy In Common?

Now, let us talk about the second part of joint tenancy vs tenancy in common. In a tenancy in common, each owner has the freedom to sell their share of the property independently.

Unlike joint tenancy, this form of ownership allows the tenants to have different percentages of property.

However, this system works among co-owners. For instance, one owner may hold 30% while other ones may hold 35% each.

But this doesn’t mean that different co-owners own specific areas belong. Rather, all owners have access to the entire property with undivided interest.

In the event of a co-owner’s death, each one designates their own beneficiary as per their shares.

A tenancy in common is what we commonly call a TIC agreement. Here, TIC stands for tenancy in common.

What Are The Benefits of Tenancy In Common?

In a tenancy in a common arrangement, owners do not need to hold equal shares. For instance, one owner might have 25% ownership while another holds 75%.

Thus, this form of arrangement suits groups or married couples. They may choose not to automatically transfer their share to the surviving spouse after their death.

For instance, if a person marries a widow with children, they might opt for tenancy in common. This will allow the widow to pass her share to her children rather than the spouse.

Disadvantages Of Joint Tenancy Vs Tenancy In Common

Now, to further our debate, let us find out the disadvantages of them both.

Disadvantages Of Joint Tenancy 

Joint tenancy does come with a few disadvantages. It can lead to issues with creditors.

If one person in the joint tenancy owes money, the creditor can end the joint tenancy. This is not so much of a good news for the other co-owners who have no part in the debt.

If you want your ownership to go to your heirs, joint tenancy may not be the best choice. Disagreements may take place between the co-owners. There may be lawsuits (partition actions) that get costly and lengthy.

Disadvantages of Tenancy in Common

Without a will, your share of property under tenancy in common may face disturbances. Mostly the state laws apply to how the distribution will happen after death.

Moreover, there will not be any automatic transfer of ownership to other owners in this case. Co-owners may sell their portion to strangers. Therefore, other co-owners may not have a say on the matter.

To Conclude

Now that we have reached the end of this article let us do a quick recap. When picking between joint tenancy and tenancy in common, let our article be your guide. There are important differences between these two.

Remember, whichever choice you make may affect your finances a lot. Property decisions are important and hold gravity. For most, these are your biggest investment.

Therefore, it could help to get advice from a real estate lawyer in your area before making this big choice.