If you are in a Joint Tenancy, there are several things you need to understand about the term Joint Tenancy and what it means.
One of the significant aspects of a Joint Tenancy is the Right of Survivorship; the right of Survivorship makes the Joint Tenancy unique in Real Estate ownership. Also, a Joint Tenancy has other aspects, such as all partners having equal shares and obligations toward the property.
Table of Contents
- Right Of Survivorship Is In Harmony With Joint Tenancy
- What Does A Joint Tenancy In Real Estate Means?
- Ways To Sever A Joint Tenancy
- Related Question
Right Of Survivorship Is In Harmony With Joint Tenancy
In Joint Tenancy for Real Estate, one of the significant aspects of a joint tenancy is the right of Survivorship. Right of Survivorship means if one party of the Joint Tenancy dies, their share in the Joint Tenancy will go to the other surviving partners.
In other words, in a Joint Tenancy, all the parties equally own the property together.
Here is a fictional example of how the Right of Survivorship Could Work In A Joint Tenancy.
Jack, Jane, William, Sally, and Tom are all friends in a Joint Tenancy for a house they own in Southern California. The friends who set up the Joint Tenancy before they were married to other spouses or partners or had heirs.
The share of ownership between each partner is as follows:
- Jack – 20%
- Jill – 20%
- William – 20%
- Sally – 20%
- Tom – 20%
As per the terms of the Joint Tenancy, they all have equal shares in the Joint Tenancy and are equally responsible for all mortgage, taxes, and property maintenance.
Jack suffers from a heart attack and suddenly dies. Because of the Right of Survivorship, his share is now divided among all the remaining partners in the Joint Tenancy. Now, each party owns the following for the property:
- Jill – 25%
- William – 25%
- Sally -25%
- Tom – 25%
The central aspect of Joint Tenancy is that the Right of Survivorship means that now all the other property owners own the property together. If one party dies, the rights or ownership of the property does not pass to their heirs but remains with the other joint tenants.
What Does A Joint Tenancy In Real Estate Means?
A Joint Tenancy in Real Estate is a legal arrangement between two or more people who own a property together. These people can be married or unmarried couples, friends, family, or business associations.
All the owners’ names are on the property deed for a Joint Tenancy. All owners in a Joint Tenancy own the property equally and jointly together.
Also, all the Joint Tenancy owners are equally responsible for the mortgage, property taxes, and maintenance. They also equally share in any income that the property may generate.
Pros Of Having A Joint Tenancy
There are many pros or reasons someone may want to have a Joint Tenancy agreement. Here are some of the significant pros of a Joint Tenancy:
- A Joint Tenancy agreement avoids probate court or procedures when one of the parties dies.
- Those in the joint Tenancy immediately inherit everything even without a will or beneficiary name.
Cons Of Having A Joint Tenancy
There are also several cons or reasons why someone may not want to enter into a Joint Tenancy but instead look at another option as a Tenancy in Common.
Here are some of the major cons of having or being in a Joint Tenancy:
- If a married couple is in a Joint Tenancy agreement and gets divorced, a Joint Tenancy can become messy as both parties must agree.
- A Joint Tenancy agreement gives all the assets of the Joint Tenancy to the remaining partner or partners of the Joint Tenancy. Therefore, the value of the property is passed on to their heirs.
- If you are in a Joint Tenancy with someone who does not pay their share of the mortgage and property taxes, you will still be responsible for them.
Because a partner in the Joint Tenancy does not pass on their share to their heirs, it instead goes into the Joint Tenancy. For many people, this may be one of the reasons why they do not want to be in a Joint Tenancy but instead may look for another kind of agreement, such as Tenancy in Common.
Ways To Sever A Joint Tenancy
You can usually sever a Joint Tenancy unilaterally without the knowledge or permission of the other tenants. The easiest way to do that is to sell your shares in the Joint Tenancy to someone who will become a tenant.
Each state may have different rules for what you can or cannot do in a Joint Tenancy, so you should check the law of the state where the Joint Tenancy is registered.
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Related Question
Why Is Real Estate In Utah So Expensive?
Utah’s real estate is expensive due to the supply and demand economic principle. Housing prices have risen so high over the last few years that most people cannot afford to buy a house in Utah, especially if they earn just the average even above-average wage.
By clicking here, you can read more about Why Is Real Estate In Utah So Expensive?
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