Joint Tenants versus Tenants in Common: Quick Overview on the Types of Title Ownership

by: Robert Pacan

So you’ve just bought a new house with your spouse, friend, or relative and your real estate lawyer asks you how you want to take title to your new home. There are two ways that your property can be owned: 1) Joint Tenants or 2) Tenants in Common.

1) Joint Tenants

Taking title as joint tenants means that each joint tenant has equal rights and responsibilities regarding the property. Joint tenancy also comes with the right of survivorship. Should one of the joint tenants die, title to the property would pass to the surviving joint tenant. To effect the title change, the surviving joint tenant must register a survivorship application. Once completed, the land registrar will remove the deceased joint tenant’s name from title, and the surviving joint tenant will own the property solely. Owning land as joint tenants also supersedes any will or intestacy laws (dying without a will).

Example : Joe and Laura are married. Joe has two kids from a previous relationship. Joe and Laura buy a home as joint tenants. Joe previously created a will that stated upon his death, he would leave his property to his two children. Joe dies. Who owns the property, the kids or Laura? Answer: Laura owns the house through the right of survivorship. The property does NOT pass through the estate upon death as the right of survivorship supersedes a will.

2) Tenants in Common

Owning property as tenants in common is useful in some situations. As tenants in common, each owner owns a percentage share of the property. If one person dies, that person’s share is transferred to his or her estate, NOT to the other owners of the property.

Example : Mike, Tim, and Paul are roommates and bought a house together as tenants in common. Mike owns 20%, Tim and Paul own 40% each. (The owners can choose any percentage of ownership they want.) Tim dies. Instead of Tim’s 40% share going to Mike and Paul, his 40% share goes to his estate. Therefore, ultimately, the ownership would be Mike 20%, Paul 40%, and Tim’s estate 40%.

What type of ownership is right for you?

Most married couples take title as joint tenants so that the property does not need to go through probate (taxed) upon death; it automatically transfers to the other spouse. Shared investment properties and roommate situations are common examples of tenants in common ownership. Ultimately, selecting ownership is done on a case by case basis and you should have a discussion with your real estate lawyer to determine the right title ownership for you and your co-owners.

This blog contains strictly general information and is not intended to replace advice from a qualified legal professional. The contents of this blog are therefore not to be relied upon as such. Any facts or examples used are for illustrative purposes only and not intended to address specific incidents or problems. Use of this information does not constitute a lawyer-client relationship. Retain a lawyer for legal advice prior to making any decisions referenced in this blog.