IN our increasingly wealth-conscious society, rising property prices have yet to deter individuals from having assets to call their own. A popular and practical solution to owning property is doing so with others. Co-ownerships exist when two or more people hold the same interest in an asset at the same time. These arrangements may manifest through couples purchasing their first home, children or grandchildren inheriting assets, adding someone’s name to the title of registered land, or even friends acquiring an investment property to generate income.

Although sharing ownership of property may seem straightforward, the legal framework governing co-ownership can have serious, and perhaps unintended, implications on the rights and obligations of each co-owner. This article will discuss the two main types of co-ownership, joint tenancies and tenancies in common, to assist you in understanding the salient features of each and how they differ from each other.

Together, Together in a Joint Tenancy

A joint tenancy contemplates two or more owners who are wholly entitled to the entire property, together. Each joint owner, therefore, owns the whole of the property and no joint tenant holds a separate or distinct interest. An important feature of a joint tenancy is the ‘Right of Survivorship’, wherein, upon the death of a joint tenant, his/her interest in land automatically passes to the surviving joint tenant(s) and not to the beneficiaries of his/her estate. Therefore, if A and B are joint tenants, upon the passing of A, B becomes the sole proprietor of the property.

Another key characteristic of a joint tenancy is the existence of the ‘Four Unities’ of possession, interest, title, and time. In essence, all joint tenants must acquire the property at the same time, through the same deed (document or act of the grantor), with each co-owner’s interest being identical in nature, and each with the right and ability to possess the entire property. All Unities must be present for a joint tenancy to subsist.

Are We Still in This Together? Severance of a Joint Tenancy

Joint tenancies do not have to last forever. If a joint tenant wishes to end this type of co-ownership, this is possible through an act of severance, which has the effect of converting the joint tenancy into a tenancy in common. Technically speaking, severance refers to the event when all Four Unities are no longer demonstrable. There are three acceptable ways to sever a joint tenancy, namely:

1. Alienation by one joint tenant of his/her interest (that is, selling or transferring his/her share in an asset), with or without the consent of the other joint tenant(s);

2. By mutual agreement of all joint tenants; and

3. By the course of dealing (conduct) of the joint tenants.

Together, But Separately in a Tenancy in Common

Where two or more people own property as tenants in common, each co-owner is said to have “undivided shares”. In other words, each tenant in common holds a specific share in the property, such as a “one-half“ or “one-third” share, but the property remains undivided. As each tenant in common holds a separate, undivided share of land, he/she is entitled to alienate his/her share. Additionally, unlike a joint tenant, a tenant in common’s share may be inherited by beneficiaries under a will or on an intestacy. However, it is important to note that although the tenant in common’s share is distinct, he/she is not entitled to exclude the other co-owners, as this would break the essential unity of possession.

Which Type of Co-Ownership Is Best?

Choosing between joint tenancy and tenancy in common depends on the co-owners’ relationship, financial contributions and long-term intentions.

Joint tenancies are often used within familial contexts as a tool of estate planning. For example, couples purchasing property together or parents seeking to transfer their property to their children upon their passing may prefer joint tenancies. Upon the death of a spouse or parent, ownership of the property passes automatically, avoiding the lengthy and costly process of probate or administration. However, if circumstances change and the joint tenancy is not severed, the Right of Survivorship may actually override estate planning wishes.

In contrast, business partners, friends or siblings may opt for a tenancy in common relationship, valuing the flexibility of being able to have unequal contributions reflect in the ownership of the property. Another benefit of entering into a tenancy in common is that each tenant is common is able to transfer their distinct interest in the property to a third party during their lifetime or the tenant in common can leave their share to the beneficiaries of their estate.

If you are considering the purchase of property or if you have recently acquired property, it is essential to seek the advice of an experienced attorney-at-law to help ensure that your interests in property are protected.

Stephanie Barnes is an Associate at Myers, Fletcher and Gordon and a member of the firm’s Property Department. She may be contacted at Stephanie.Barnes@mfg.com.jm or through the firm’s website www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice.