Real Property Ownership and Interests
Methods of Ownership and Holding Title
Tenancy by the Severalty
When ownership of real property is in the hands of an individual or corporation it is referred to as a severalty estate. The law considers a corporation an individual which must act by corporate resolution with official decisions by the board of directors. The word severalty is used here in the sense of “severed” or separated as rights exclusive to the individual.
Law regarding property ownership may be statute law (state legislated) or common law (court precedent), depending upon the state. When two or more people are involved in ownership they may own as either Tenants in Common, or as Joint Tenants, or as Tenants by the Entireties.
Tenants in Common
Tenants in Common exist when two or more people own an undivided interest in the whole of the property. That is, they each own a percentage share, which may or may not be equal, but does not represent a specific physical part of the property. The shares in a tenancy in common are independent of each other and shares may be sold or even separately mortgaged or devised.
Joint Tenants
Joint Tenants also own an undivided interest in the whole, but shares must be equal, and may not be inherited since there is a right of survivorship. This means that upon the death of one of the parties, their share is automatically vested equally in the surviving partners. The shares may be sold, but if they are, that portion of the joint tenancy is dissolved and the new party becomes a tenant in common. In most states, a joint tenancy must specifically state “with rights of survivorship”, otherwise, it may be considered a tenancy in common. A joint tenancy will have:
Both Joint Tenancy and Tenancy in Common may be terminated through partition action. The dissolution of a joint tenancy is known as Partition.
Tenancy by the Entirety
Tenancy by the Entirety is joint tenancy specifically for a married couple. Upon the death of a spouse, the title will automatically vest in the surviving spouse. It differs from a joint tenancy in that the shares cannot be sold to a third party and the right of survivorship cannot be extinguished. Only creditors against both husband and wife can enforce a lien against the property. Married couples may choose to act as Tenants in Common or as Tenants in the Entirety. If they choose Tenants in the Entirety, then both names must appear on the deed as a married couple.
