How title is held to real estate requires a review of the actual deed of conveyance to you. The legal terms used on a deed: “Tenants in Common”, “Joint Tenants”, “Joint Tenants with Rights of Survivorship” and “Tenants by the Entireties” determine the interest that you own.

Owners of property held as Tenants in Common have distinct and separate interests in the real property. Each owner, as tenants in common, shares a right of possession. Either owner may convey their interest in the property to another person without the consent of the other tenants in common owners. There are no rights of survivorship to property held as tenants in common. When an owner dies, their share does not automatically vest or transfer to the surviving owner. Their property is required to transfer to their heirs pursuant to their estate plan. If the deed is silent as to how the property is held, the statutory default is that the property is held as Tenants in Common.

Owners of property held as Joint Tenants hold equal and undivided interests in the real property. As a joint tenant they are entitled to a right of survivorship. When a joint tenant dies, their interest automatically transfers or vests with the surviving joint tenants. A joint tenant may also transfer its interest in jointly held property without the consent of the remaining joint tenant owners. A transfer by a joint tenant will sever the joint tenancy and the resulting ownership interest will be tenancy in common as described above. (Interestingly, if there are three owners to jointly held property and only one owner conveys its interest in the jointly held property, then multiple tenancies are created. For example, if A, B and C are joint tenants and A’s interest is conveyed to a third person, then the third person is a tenant in common with respect to the one-third interest. B and C remain joint tenants with respect to the undivided two-thirds interests.)

Owners of property held as Joint Tenants with Rights of Survivorship hold equal and undivided interest in the real property. As a joint tenant with rights of survivorship, their interest automatically transfers or vests with the surviving joint tenants. An owner as joint tenants with rights of survivorship, however, cannot sell or pledge their interest without the consent and signature of the other joint owners.

The final ownership interest, Tenants by the Entireties, is joint ownership in real property held exclusively between spouses and includes a right of survivorship. Only spouses may hold property as tenants by the entireties. This characteristic of tenancy by the entireties property provides certain protection from judgment creditors. For example, a judgment creditor of one spouse generally may not levy against the entireties estate to satisfy a debt unless the judgment is against both spouses. Entireties property, similar to joint tenants with rights of survivorship, prevent either spouse from transferring or encumbering the interest in the entireties property without the other spouse’s consent.

Transfers in real property by quit claim deed and warranty deed, are common within the framework of estate planning. However, it is extremely important to be precise in the selection of the “tenancy” created. Incorrect tenancy descriptions may leave the intended transfer subject to challenge. Therefore, it is important to understand the limitations of each type of tenancy.