Joint Tenancy vs. Tenants in Common: What's the Difference?

Use these links to jump to different sections:

• Joint Tenancy vs. Tenancy in Common
• The Right of Survivorship
• Pros and Cons of Joint Tenancy vs. Tenancy in Common
• Questions for an Attorney
• Finding the Right Attorney For Your Needs

There are many situations in which you could own property with another person. For example:

• You and a friend purchase a piece of real estate together. You want to share it for recreation purposes. Once you have received the title, what share of the property is yours? What ownership interests do you have as a co-owner?
• You and your spouse have just bought your first house. Do married couples own equal shares of the property? Or does one spouse own more than the other?
• Your aunt bequeathed their house to you and your sibling. What are your ownership rights in your aunt’s house alongside your sibling?

Each of these common scenarios is an example of joint ownership, where two or more people own a piece of real property simultaneously.

Your co-owner rights depend on the kind of joint ownership established in your title or ownership agreement. There are two prevalent types of joint ownership: joint tenancy and tenancy in common. This article will cover the essential differences between these types of ownership so that you can make the best decisions as a property owner.

Joint Tenancy vs. Tenancy in Common

Both joint tenancy and tenancy in common make you a joint property owner with other people. While they share four general requirements, joint tenancy and tenancy in common have several key differences.

The Elements of Joint Tenancy

For there to be a joint tenancy, these four requirements have to be met:

• Same time. Joint tenants must receive their interest in the property at the same time.
• Same source. Joint tenants must receive their interest in the property from the same source, such as a deed or title.
• Equal interest. Joint tenants must possess an equal share of the property. For example, suppose two friends each contributed 50% of the purchase price for a piece of real property. In that case, they have an equal interest in the property. However, if one friend contributed 20% and the other contributed 80%, their shares are unequal – they are not joint tenants.
• Undivided interest. As co-owners of the property, joint tenants have an equal right to possess and use the entire property.

The Elements of Tenancy in Common

Tenancy in common has the same elements as joint tenancy but gives different requirements:

• Interest doesn’t have to be at the same time. Unlike joint tenants, tenants in common don’t have to receive their interest in the property at the same time.
• Interest doesn’t have to be from the same source. Tenants in common can receive their interest in the property from different sources (deeds, titles, wills).
• Equal interest. Unlike joint tenants, tenants in common don’t have to possess equal shares in the property. If one owner has a greater interest than the others, a tenancy in common exists.
• Undivided interest. This requirement is the same as in joint tenancy: tenants in common have an equal right to possess and use the entire property.

To sum up: joint tenants must receive their property interest simultaneously and from the same source and must have an equal share with equal right to possess the entire property.

On the other hand, tenants in common can receive their interest at different times and sources and don’t have to possess equal shares. However, tenants in common do have an equal right to use the entire property.

The Right of Survivorship

The other main difference between joint tenancy and tenancy in common is what happens to a co-owner’s share of the property when they die.

With joint tenancy, surviving joint tenants have the right of survivorship. This means that a deceased owner’s property transfers automatically to the surviving owners.

Because joint tenancy provides the right of survivorship, you may sometimes see it as “joint tenancy with right of survivorship” and abbreviated JTWROS.

In a tenancy in common, there is no right of survivorship. This means that property ownership does not automatically pass to the surviving owners.

Instead, the property belongs to the deceased owner’s estate. A deceased owner could name the surviving owners as beneficiaries of their estate, but they don’t have to. They could leave it to their family members or dispose of it however they see it.

Pros and Cons of Joint Tenancy vs. Tenancy in Common

Whether joint tenancy or tenancy in common is the best fit for you will depend on your specific circumstances and overall estate plan.

For some people, joint tenancy will be the best setup; for others, tenancy in common will be more attractive. Some factors to consider include:

• The system of probate. Probate is the process of proving that a will is valid and administering an estate. Joint tenancy could help simplify the process of estate planning since the property automatically passes to your surviving joint tenants and does not enter the probate process. This is typically the default option with married couples and can also be used by unmarried partners buying a house together.
• Taxes. Joint tenancy can bring tax benefits to homeowners, including delaying estate tax collection or avoiding gift taxes. However, things can get more complicated if joint tenants are not married couples. If you have questions about the tax benefits of joint tenancy versus tenancy in common in your specific situation, talking with a real estate lawyer could be highly beneficial.
• How to terminate joint ownership. There are different ways to terminate a joint tenancy and a tenancy in common. Ending a joint tenancy could involve:
  • Partition of the property
  • Selling your property interest to someone else
  • Transferring your interest to yourself. Depending on your state’s laws, you can do this directly or through a third-person “straw man” who transfers the interest back to you.

Ending a tenancy in common can also happen in different ways:

• Through a court-ordered partition of the property
• Selling the property and dividing the money among the co-owners
• One co-owner buys up all the shares in the property

Questions for an Attorney

If you are considering the best way to set up your property ownership, getting good legal advice is essential. A qualified attorney can guide you through all the different options to help you make the best decision.

The good news is that many attorneys provide initial free consultations to prospective clients. These meetings are an excellent resource for both attorney and client because it allows the attorney to hear the facts of the case while the client can determine if the attorney meets their needs.

The best way to decide whether an attorney is the right fit is by asking informed questions. Here are some good questions to ask during your initial conversations:

• What is your fee, and what options for billing do you offer?
• Given my situation, would joint tenancy or tenancy in common be a better fit?
• What are my tax benefits if I choose joint tenancy?
• What are the factors I should consider in creating an ownership agreement?
• How should I resolve disputes with my co-owners?
• What legal services do you offer?

Finding the Right Attorney For Your Needs

It is essential to approach the right type of attorney—someone who can give you legal help through your entire case. You can visit the Super Lawyers directory and use the search box to find a lawyer based on your legal issue or location. 

For legal advice in setting up ownership agreements or settling disputes, consider looking for a lawyer practicing real estate law.