When it concerns owning property in California, there are two typical methods that individuals can hold title to a residential or commercial property: Joint Tenancy and Tenancy in Common. While these terms might sound similar, they have distinct legal implications that can have a considerable influence on your rights and obligations as a residential or commercial property owner.

In this short article, we will check out the crucial distinctions between Joint Tenancy and Tenancy in Common, and help you determine which option is best fit for your particular situation.

Firstly, Let's start with the standard definitions:

Joint Tenancy Definition

Joint Tenants is a kind of residential or commercial property ownership where 2 or more people own residential or commercial property together with equal rights. It is characterized by the "right of survivorship," implying when one owner dies, their share of the residential or commercial property immediately moves to the enduring owners. This process is called the "right of survivorship." Joint Tenancy is commonly used for couples or member of the family who wish to guarantee that the surviving owner(s) will acquire the residential or commercial property without the requirement for probate.

Common Use: This kind of ownership is popular among couples or family members, as it guarantees that the residential or commercial property passes to the enduring owner(s) without the need for probate.

Legal Implications: In Joint Tenancy, each owner has a concentrated interest in the whole residential or commercial property. The right of survivorship is a crucial feature, bypassing the probate process and straight transferring ownership to the enduring joint tenants.

Joint Tenancy Benefits And Drawbacks

Right of Survivorship: The residential or commercial property automatically passes to the making it through owners upon the death of one owner, avoiding probate.
Equal Ownership: Each tenant has an equal share and equal rights to the entire residential or commercial property.
Simplicity in Estate Planning: Simplifies the process of transferring residential or commercial property upon death.

Lack of Flexibility in Bequeathing Residential or commercial property: Owners can not pass their share of the residential or commercial property to anyone other than the joint renters upon death.
Potential for Disputes: If one owner wishes to offer or encumber the residential or commercial property, all owners must agree.
Credit Risk: The residential or commercial property may be at risk if among the joint occupants faces legal judgments or personal bankruptcy.

Tenancy in Common Definition

Tenants in Common is a way of holding title where 2 or more individuals own residential or commercial property together, but with separate and distinct shares. Each owner can offer, move, or mortgage their share individually. In the event of an owner's death, their share of the residential or commercial property passes to their heirs or beneficiaries as directed by their will or through intestate succession.

Common Use: This is often used by organization partners, buddies, or investors who want to own residential or commercial property together while maintaining different control and ownership over their respective shares.

Legal Implications: Upon the death of an owner, their share passes to their successors or as directed by their will, rather than instantly moving to the other owners. This allows for more versatility in estate preparation.

Tenancy in Common Pros And Cons

Advantages:

Flexible Ownership Shares: Owners can hold unequal shares and can independently manage their part of the residential or commercial property.
Independence in Decision Making: Each owner can sell or encumber their share without needing permission from the others.
Estate Planning Flexibility: Owners can bequeath their share to anybody in their will.

Disadvantages:

No Right of Survivorship: The residential or commercial property does not instantly move to the other owners upon an owner's death, potentially resulting in complicated estate concerns.
Potential for Disagreements: Differences in management or financial investment goals can lead to disputes.
Risk of Partition: Any owner can submit for a partition action, which can force the sale or division of the residential or commercial property.

Which is Better Tenancy In Common or Joint Tenancy?

The 2 most common ways to jointly own residential or commercial property with one or more persons in California are joint occupancy and tenancy in common California law. The default method of co-ownership is actually tenancy in common California. Simply put, unless the deed specifically mentions the method of co-ownership, the co-owners will hold title as occupants in common California. Accordingly, it is crucial to define the technique of co-ownership in the deed, specifically if the co-owners do not wish to own the residential or commercial property as occupants in common. (Click here to check out the distinctions between deed and title)

A few of the resemblances and differences in between these two methods of co-ownership are explained below.

Joint Tenants vs Tenants In Common California Law Similarities

● Each owner has an equal right to have, use, and advantage from the whole residential or commercial property

● Each owner is accountable for their proportionate share of the costs of the residential or commercial property, including payments of mortgage, maintenance, residential or commercial property taxes, insurance, and so on ● Each owner is entitled to their in proportion share of income from the residential or commercial property, such as rental income

● Each owner has a right to encumber their separate interest in the residential or commercial property without impacting the co-owner(s) interest(s)

Tenancy in Common vs Joint Tenancy - Key Differences

Transfer Upon Death: In Joint Tenancy, ownership automatically moves to the enduring owners, while in Tenancy in Common, it passes according to the departed owner's will or intestate succession.
Ownership Shares: Joint Tenancy includes equal ownership shares, whereas Tenancy in Common permits unequal shares.
Independence in Ownership: Tenancy in Common deals more self-reliance to each owner regarding their share of the residential or commercial property.

Accordingly, among the primary problems to consider when deciding whether to jointly own residential or commercial property as occupants in typical California or joint occupants is how the owner's interest will transfer upon death.

For instance, if a couple or moms and dad and child jointly own residential or commercial property, then holding title as joint occupants is more suitable as the decedent's interest will instantly move to the enduring co-owner without the inconvenience of going through probate or other case. However, if good friends or siblings jointly own residential or commercial property, then holding title as tenants in typical may be more suitable so that each owner can determine who will receive their interest in the residential or commercial property when they pass away.

FAQ - Joint Tenants and Tenants in Common

Q1: Can a joint tenancy be transformed into a tenancy in typical?

Yes, a joint tenancy can be converted into a tenancy in typical through a procedure called "severance," which typically includes one of the joint tenants moving their interest to themselves or another .

Q2: How is the sale of residential or commercial property handled in tenancy in common?

In tenancy in typical, each owner can offer or move their individual share separately. However, offering the whole residential or commercial property typically needs arrangement from all co-owners or a court order.

Q3: What occurs if a joint renter desires to offer their share?

In joint tenancy, a person can not offer their share without the consent of the other joint renters. Selling or moving their share will usually convert the joint occupancy into a tenancy in typical for that share.

Q4: How are expenditures and revenues divided in tenancy in common?

In occupancy in typical, expenses and profits are typically divided according to each owner's share in the residential or commercial property, which may not always be equivalent.

Q5: Is joint occupancy a good option for unmarried couples?

Joint tenancy can be an excellent option for unmarried couples as it permits the right of survivorship, guaranteeing that the residential or commercial property passes straight to the surviving partner without probate.

Q6: Can creditors of one renter in common claim against the residential or commercial property?

Creditors of one renter in common can declare versus that tenant's share of the residential or commercial property, however not against the shares of the other owners.

The Schorr Law property lawyers have an excellent deal of experience handling occupancy disputes, partition actions, and quiet title actions also. We regularly deal with disputes concerning ownership of real residential or commercial property regardless of whether a party is arguing real ownership is properly shown by record title. To set up a consultation with among our attorneys, contact us today.