Tenancy or Co-ownership of Real Estate

Many times when I am at the closing table with buyer clients the attorney will ask how the buyers would like to hold the property.  There are 3 basic forms of co-ownership in Massachusetts Real Estate Law.  Tenants in common, Joint Tenancy or Joint Tenancy with Rights of Survivorship and Tenants in Entirety. Quite frankly the closing can be a bit overwhelming but many buyers do not think much of  the legalities in co-ownership and they do what the lawyer says.   Here are some basic definitions of the common ways to hold real estate with more than one owner.

Here are basic definitions of co-ownership, bear in mind Massachusetts Real Estate Law goes into more detail of each.  Also laws very from state to state.   It is definitely worth talking to an attorney for a few minutes so your ownership interest is handled in the manner you intended.

Tenants in Common

Each owner’s proportion is distributable as part of the owners estate, so that if one of the account holders dies, that owner’s heirs are entitled to that proportional share of the ownership.  Individual ownership can be transferred freely.

Joint Tenants with Right of Survivorship

In the case of a joint ownership, on the death of one owner, ownership of the home is transferred to the remaining owner or owners.  Individual ownership can be transferred freely.

Tenants By Entirety

Similar to Joint Tenants except it is reserved for married couples and individual ownership cannot be transferred freely.

I wanted to bring up this topic as I recently had a situation where a client wanted to sell and the co-owner had recently passed away.  The co-owners held the property as Joint Tenants with Rights of Survivorship.   Luckily being in the business as long as I have, I have a number of attorneys that will take a phone call from me to give me legal advice.  I had a good idea of what was going on but wanted to verify with the attorney my thinking was correct.

So, with this particular client, because the property was held as Joint Tenants with Rights of Survivorship, upon the co-owner’s death the property automatically transfers to the remaining owner avoiding any complicated legal issues.  All that is needed is a copy of the death certificate to then move forward and transfer the property.  Now if the owners had held in the property in Tenants in Common the ownership would pass to the owners heirs/estate.  The complication would come if the one owner passed without a will it would make the sale a little bit more complicated from a legal standpoint.  If they had a will both parties would still have to agree to sell.
With married couples, I have run into circumstances where they want to hold the property as Tenants by the Entirety, but I also have seen married couples hold in Tenants in Common.  Why would a married couple want co-own a property as Tenants in Common?  I usually see this with older couples who have remarried but would like their ownership interest in a home to pass to their children.
As you can see there is many considerations when involving co-ownership of real estate.  If you have any concerns, always consult an attorney!!


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