Is It Better to Hold Property As Tenants in Common or Joint Tenants?

Whenever you are looking to purchase a home, the question of tenancy in common and joint tenancy might be raised when there are two or more individuals involved. These individuals could be common law partners, husband and wife, a single parent with a child of legal age, brothers and sisters or completely unrelated individuals who wish to make an investment. The common thread with tenancy in common and joint tenancy is the fact that there are two or more owners for a single property.

In joint tenancy the individuals own all the property with their interests joined together and not subject to division. There are conditions and rules that apply with this type. First, decisions must be made together regarding the property such as about selling it. Any other issues involving the home must also be jointly decided on. For example, getting a second mortgage would have to be jointly entered into under joint tenancy.

Tenancy in common is differs in some important respects from holding property as joint tenants. When it comes to tenancy in common individuals may own pieces or shares. They may or may not be equal and in this instance when selling the property, one person can sell his or her share, take out a second mortgage on it, or do whatever they care to with their share. It is owned separately from the other owner.

Here are a few things to consider when buying a home and looking into choosing to buy it as joint tenants or as tenants in common. An important thing to keep in mind is that when considering tenancy in common, there is no requirement for each owner to agree to a particular action in connection with the property. The owner (either or any) can sell his share without the permission of the other owner. The trouble is that most people will not want to buy just part of the property especially if the property is a house. This means that if the ownership of the property is held as tenants in common it could possibly be difficult to sell .

In the case of purchasing a home together with others, then, the joint tenancy type of ownership can be a problem when it comes time to sell. You are going to find the most benefit will most likely result from the use of joint tenancy. With joint tenancy when multiple owners share ownership of the property, both owners must agree for anything to be done with the property, so their offering it for sale at all means it is all for sale, without any separation of shares.

In joint tenancy, if one of the owners should die while the property is in that joint ownership, the property immediately reverts to the other owner. In tenancy in common the property share can be passed on by a will, subject to death taxes, inheritance taxes and a many other complications which can come when a property owner passes on. This can present difficulties for the buyer, surviving owner who wants to sell and the person to whom the share was left.

There can be some cases, however, where holding tenancy in common can be the best way to go. For example, for a large residential complex where there are multiple residences on the property. In that situation, tenancy in common would let each person have complete control over his or her share.

For a few more advice about real estate, here are some more traps to avoid in selling which you will find to be informative.