Concurrent estate is a legal term that refers to property that more than one individual owns at a time. When more than one individual owns real property, they are co-owners or concurrent owners.
There are three fundamental types of concurrent estates: joint tenancy, tenancy in common, and tenancy by the entirety.
What Is Joint Tenancy?
Joint tenancy is the holding of real property jointly by two or more individuals. It can only ensue if all the parties receive equal property shares with the same deed and obtain it simultaneously.
The share automatically passes when either party dies to the other remaining co-owners. It can be broken if one of the co-owners transfers or sells their interest, in which case it reverts to a tenancy in common.
In a joint tenancy, two or more individuals own undivided property shares of real estate. Along with tenancy in common, joint tenancy is one of the most common types of joint possession of real property. Joint possession means that more than one individual holds interests in the title to the land.
Yet, joint tenancy is much different from a tenancy in common. The primary difference is that joint tenants may claim the “right of survivorship,” while tenants in common may not. The right of survivorship means that if one joint tenant becomes deceased, their share of the property interest will pass to the surviving joint tenants. In many jurisdictions, the joint tenants must specifically claim the right of survivorship.
How Is a Joint Tenancy Created?
To form a joint tenancy, the tenants must show that four conditions (the “four unities”) have been met:
- Unity of Time: All tenants must acquire the property at the same time
- Unity of Title: All tenants have obtained the title by the same document
- Unity of Interests: All tenants must hold an equal interest in the land
- Unity of Possession: All tenants exercise equal rights to possession
If any of these requirements are not met, most jurisdictions will assume that a tenancy in common exists rather than a joint tenancy. For instance, suppose the tenants all obtained their interests at different times. In that case, the “unity of time” requirement is lacking- thus, the form of title to real estate will likely be a tenancy in common.
What Are the Features of a Joint Tenancy?
There are many different joint tenancy pros and cons. Most tenants will enter into a joint tenancy arrangement to take advantage of these distinguishing characteristics:
- Right of Survivorship: Each tenant’s share will pass to the other tenants upon death. This right usually must be declared by the tenants in the title.
- Avoid Probate: Since the shares pass to the tenants under the right of survivorship, this permits the tenants to bypass the expensive probate process
- Equal Use and Possession: Joint tenants are entitled to use and possess the entire property, even if they only own a portion or share of it
- Rights to Rent and Profits: Joint tenants are authorized to a share of the rents and profits generated by the land in proportion to the percentage that they own
On the other hand, joint tenancy can carry an increased number of tenants’ duties and obligations. For instance, all joint tenants are accountable for contributing funds for routine repairs.
How Can a Joint Tenancy be Terminated?
Any of the joint tenants may terminate a joint tenancy if any of the “four unities” listed above are disrupted. Terminating a joint tenancy before the death of one of the tenants is known as “severance” and usually results in a tenancy in common between the remaining tenants.
For instance, if a joint tenant conveys their interest to a third party through sale, then the unity of title no longer exists between the joint tenants. The joint tenancy agreement would effectively be terminated, and rather, a tenancy in common would be created with the third party.
Therefore, a party to a joint tenancy should consider carefully before transferring or selling their property interest. Doing so could terminate the joint tenancy, and the party would lose all their privileges and rights as a joint tenant.
What Is Tenancy in Common?
Tenancy in Common is a shared tenancy in which each holder has an individually transferable interest in real property. Tenants in common may have different ownership interests (ex: One party holds 20%, another owns 25%, and a third owns 55%).
This concurrent estate does not permit the right of survivorship.
What Is Tenancy by the Entirety?
Tenancy by the Entirety is the third type of concurrent estate held by a husband and wife. When one spouse passes, the surviving spouse directly and automatically becomes the sole owner of the property.
This is known as the right of survivorship. It’s essential to mention that not all states recognize tenancy by the entirety.
A tenancy by the entirety is a form of joint possession of real property. Tenancy by the entirety is joint ownership of property by a husband and wife who are treated as a single entity. Both husband and wife can possess and use all of the property. If one spouse passes, the other inherits the whole property. Neither husband nor wife can sell any part of the property without consent.
The creation of a tenancy by the entirety is much like creating a joint tenancy plus marriage.
To form a tenancy by the entirety, five requirements must be met:
- Requires marriage
- Husband and wife must obtain the property at the same time
- Husband and wife must receive title by the same will or deed
- Husband and wife must have equal interests in the property
- Husband and wife must have an equal right to possession
If any of these conditions is missing, most courts will assume that the more favored tenancy in common is formed.
About half of the states recognize tenancy by the entirety. The modern trend among states is to abolish tenancy by the entirety. Many states no longer prefer it because often creditors of one spouse cannot levy against property held in tenancy by the entirety.
What Rights Do Concurrent Owners Have?
Concurrent estate holders generally have the following rights:
- Each owner has an unrestricted right of accessing and using the property;
- Each owner has the right to an accounting of proceeds made from the property; and
- Each owner has a right to contribute to the costs of owning the property (such as helping with mortgage payments, upkeep, repairs, etc.).
What Obligations do Concurrent Owners Have?
Concurrent property owners assume several responsibilities. For example, you are responsible for paying your percentage of taxes, mortgage payments, maintenance, repairs, and anything else needed by the state.
What Are Common Disputes Among Concurrent Property Owners?
As in any instance where you own property with another person, concurrent estates have their proper share of disputes among property owners.
Below are some common disputes:
- Conflicts over ownership and title;
- Debates over rent and monthly payments;
- Altercations connected with profits from the property;
- Disputes regarding the individual owner shares- it can sometimes be difficult to calculate the value of a co-owner’s share; or
- Conflicts involving the transfer, sale, or distribution of a property interest through inheritance.
Many concurrent estate disputes can be bypassed if the parties have a written agreement regarding the property.
Should I Contact an Attorney for Concurrent Estate Disputes?
Hiring a property lawyer is to your advantage if you are involved in a dispute over a concurrent estate. This is especially true if you or one of the co-owners must file a lawsuit.
A knowledgeable lawyer can help represent you in court and help defend your property interests according to the laws of your state.