Joint Tenancy v. Tenants in common – What’s the Difference?

What are Jointly Owned Assets?

Joint assets could include a jointly owned home or a joint bank account. Your partner, spouse or child could jointly own these assets with you.

Joint owners have legal rights of survivorship. This means a joint asset passes on death to the surviving owner.

Real Estate

You can hold real estate in joint ownership or joint tenancy. The law uses the term “tenancy” to describe the type of ownership. That’s strange because it’s an ownership and not a tenant issue.

Registered deeds, transfer or a title document can control your joint tenancy. A will – unless it is the will of the last surviving joint tenant – does not control a joint tenancy.

Tenants in common

What does the law presume about your ownership rights? Your percentage interest in the property's value determines your ownership rights.

Rachel purchases a house with her boyfriend, Trevor.  She pays 75% of the down payment. Trevor contributes 25% or $25,000.

Their lawyer registers the deed to their new home. The deed only states they are “tenants in common.”

They could have registered the property ownership as 25% for Trevor and 75% for Rachel.

What does tenants in common mean?

There is no automatic right of survivorship. If Trevor dies, his will would control what happened to his share of the property.

If Rachel were to break up with Trevor, she would receive 75% of the down payment and presumably 75% of any profit.

I say presumably because they could have agreed to alter this arrangement by having a written agreement to set up a

• joint venture,

• partnership, or

• common law cohabitation 

• prenuptial contract

In such written agreements, they could have specified equal sharing of carrying costs, mortgage payments, renovation or repair costs.

Also, all subsequent profits could have been divided 50/50, even though the initial down payments were unequal. 

If Rachel died, her “tenants in common” interest in the property would not go to Trevor automatically. She would need to sign a will to leave him the real estate.

What if Rachel and Trevor were in a long-term common law relationship? These are frequently the types of cases that end up in court.

There are more dangers of joint ownership that I’ll explain in the next post.