What’s The Difference Between Joint Tenants And Tenants In Common?
In this blog post, we’ll briefly explain a common confusion when buying an apartment or house with one or more people. Do you know the difference between joint tenants and tenants in common?
Both are legal ways of holding the property. However, the key detail lies in how the property equity is held.
Much as the name says, joint tenants owe the property jointly. This means that in practice, if one of the joint tenants dies, the ownership of shares of the deceased immediately transfers to the surviving tenant. Also, it is not possible to leave your share of the property in a will to anyone else. Should you wish to do that, it’s good to know you can sever the joint tenancy at any time, and switch to the tenants in Common agreement.
Tenants in common
Tenants in common are also co-owners of the property, same as joint tenants. The only two differences being a) each of the co-owners owns a specific share of the property, and b) this share can be left to another beneficiary via a will. As opposed to joint tenants, if one of the tenants dies, their ownership of the shares does not automatically pass on to the surviving tenant (if so, it has to be specifically mentioned in the will). The tenants in common have to agree on their denominations in the property, which normally hinges on how much each person paid for the property; i.e. the ownership can be divided in a 50:50 ratio, 70:30, etc. These denominations are officially recorded in the so-called declaration of trust.
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