When you purchase a home, questions about joint tenancy and tenancy in common might come up especially when there are several individuals. These persons could be partners, husband and wife, a parent with an adult child, brothers and sisters or unrelated investors. The common thread the two forms is the fact that there are multiple owners for a single piece of property.
With the terms of joint tenancy the people involved in ownership own all the property and their interests are not subject to being separation. There are conditions and rules that apply with this kind of tenancy. First, making decisions must be done jointly regarding the property such as to sell it. Any other issues about the property must also be jointly decided on. For example, getting a second mortgage would need to be jointly entered into because of joint tenancy.
The form of tenancy in common is differs in some important respects from holding property jointly. When it comes to tenancy in common individuals may own pieces or shares of the property. They may or may not be equal. When selling property, one person can sell his or her part of the property, take a second mortgage out, or do what they care to with their share. It is owned as a separate entity from the other owner.
Consider these issues when you are purchasing a home and deciding about choosing to buy it under tenancy in common or joint tenancy. A big thing to keep in mind is that when looking at in common tenancy, there is no requirement for each owner to agree to a specific action in connection with the property. In other words, the owner (either or any) can sell his or her share of the property without the permission or knowledge of the other owner. However, most people will not want to buy only portion of the property especially if the property is a house.
When you are looking to buy a home with others, then, the joint tenancy form can cause problems when it comes time to sell. The most benefit will most likely come from the use of joint tenancy. This is because when several owners hold the property, both owners must agree for anything to be done with the property.
With joint tenancy, should one of the owners die while the property is in that joint ownership, the property reverts to the other property owner. In regards to tenancy in common the property share can be willed, and it is subject to death taxes, and similar complications that can come with the death of a property owner. This can present problems for the buyer, surviving owner and the person to whom the share was left.
There are some instances, however, even for a home or residential property, where tenancy in common can be the right way to have ownership. For example, for a large residential property where there are a number of residences. In that situation, tenancy in common would allow each owner to have independent control over his or her individual share of the property.
For some more useful advice on the subject of the housing market, here are some more tips for selling your home which you will find informative.