What is Joint Tenancy?
Joint tenancy is a form of co-ownership, used when two or more individuals have equal ownership rights and obligations to the property, physically and financially. Those involved may be relatives, friends, or even business partners.
Why is this term important?
Joint tenancy is established with a legally-binding agreement, made through a deed. This agreement gives co-owners a way to secure their respective rights and responsibilities to the property.
An important aspect of joint tenancy is the right to survivorship. This means that if one of the joint tenants dies, their share of the property automatically passes to the surviving joint tenant(s), rather than to their heirs or beneficiaries. This is an important difference between joint tenancy and tenants-in-common.
Here is an example:
If two friends buy a home together they may opt for joint tenancy. The deed to the property will name both parties and list them as joint tenants.
This way, they are both guaranteed 50% of the rights, and responsibilities, of the property. If they decide to rent out the property, each friend would be entitled to 50% of the profits. This also means they are each responsible for 50% of the mortgage payments, taxes, and maintenance costs. If one party doesn’t pay their share, the other will have to assume responsibility.
