Joint Tenancy and Tenancy in Common
When two or more people purchase real estate, it is essential that to consider what type of ownership they want to set up. In this article, we cover the main differences between the two types of co-ownership. Bothjoint tenancy and tenancy in common are forms of co-ownership. However, they differ in the way they are created. Four unities should exist in order to create a joint tenancy:
- Unity of time (meaning that the tenants must obtain their interest at the same time);
- Unity of title (joint tenants must receive interest from the same document);
- Unity of interest (it must be the same estate or interest);
- Unity of possession (joint tenants must have the right of possession for the whole estate)
- Tenancy in common, however, requires only one unity of possession to be created.
A joint tenant owns an undivided interest in
the whole estate, while in a tenancy in common such interest is divided between
co-owners, meaning that each co-owner has a separate ownership share in the
property.
Other Tenancy Points to Consider
Another significant distinction is the right of
survivorship, which is essential for a joint tenancy, and absent in a tenancy
in common. The right of survivorship means that when one joint tenant dies, the
whole estate automatically passes to the surviving joint tenants. This process
continues until there is a single survivor. The right of survivorship limits
joint tenants’ rights to vest their interest to anyone in a will. However, they
can do it during their lifetime. By contrast, tenants in common
can leave their interest by a will to anybody without notifying the other tenants.
These two forms of co-ownership differ from each other also
by the ways of their termination. Any act that destroys one of the unities will
bring a tenancy to the end. Tenancy in common, unlike a joint tenancy, will not
be terminated once the tenant sells his interest or estate. In a joint tenancy,
in addition to the sale of the interest or estate to a third party, the tenant
may also mortgage his estate or transfer it to him/herself creating a severance
of a joint tenancy. The latter is the basis for the termination of a joint
tenancy.
Knowing these differences will help you to decide which type
of ownership you want when you purchase real estate in British Columbia.