Joint Tenants with Rights of Survivorship Explained

Senior black couple standing outside a large suburban house

When you buy a real estate with someone in New York State there are three ways you could take title: (i) as tenants in common; (ii) as joint tenants with rights of survivorship; or (iii)  if married, as tenants by the entirety. The word “tenants” refers to individuals who are co-owners and not to be confused with tenants in the context of a lease.

Tenancy in Common

A tenancy in common (TIC) is when multiple people own different portions of the property. In TIC co-owners are not required to own equal shares or bear equal financial responsibilities for the property. When one of the tenants dies, their share is conveyed to their own respective heirs and not to the other tenants. Each tenant can freely transfer their interest to a third party without the consent of the other tenant.

Joint Tenants with Rights of Survivorship

Joint tenants with rights of survivorship (JTWROS) is ownership by two or more individuals who have equal rights to the property while alive and survivorship rights at death. Rights of survivorship means that when one owner dies the entire ownership interest transfers to the surviving owners.  This survivorship right is the main benefit of structuring this type of ownership. It allows the surviving co-owner(s) to gain title and control over the property without the need to go through probate proceedings. In New York, if the parties are not married and rights of survivorship are not specified in the title documents, tenancy in common is presumed.

Tenancy by the Entirety

When spouses take title to real estate, New York law presumes that they own the property with rights of survivorship, called “tenants by the entirety”.  An advantage is that creditors cannot put a lien on property owned by a couple as tenants by the entirety. Tenancy by the entirety cannot be altered except by mutual consent. A husband and wife cannot be tenants the entirety with a third party as it would violate the “four unities of title.”

What if you took title with someone as JTWROS but later no longer wish for that someone to inherit your share?  One owner can sever the joint tenancy without a consent of another tenant by transferring their interest in the property to a third party or recording a deed evincing such intent. This turns the JTWROS into a tenancy in common.

What if one owner in either a tenancy in common or joint tenancy with rights of survivorship wants to the sell the entire property? The sale of the entire property interest to a third party requires the consent of all joint tenants. If disagreement arises regarding ownership, use or sale of the property, the only option is a legal action known as partition so that a judge can order the sale of the property. If one owner insists on selling, the court is likely to order a partition sale.

The decision on how to take title to real estate depends on individual circumstances.  Each ownership structure has its pros and cons. TIC is often used by business partners when purchasing an investment property. Parents often own property with children by JTWROS. The implications of joint tenancy versus tenancy in common should be considered. If you are not sure which form of title best suits your needs, consult a real estate or estate planning attorney.

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Burner Law Group, P.C.

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