How to Terminate Joint Tenancy

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 What Is a Joint Tenancy?

A brief joint tenancy definition would be when two or more people own undivided property shares of a single piece of real estate. Alongside tenancy in common, joint tenancy is one of the most common types of joint possession of real property; meaning, more than one person holds interests in the title to the land.

However, it is important to note that joint tenancy greatly differs from tenancy in common. The largest difference would be that joint tenants may claim the “right of survivorship,” while tenants in common may not. The right of survivorship essentially means that if one joint tenant dies, their share of the property interest will pass to the surviving joint tenants, instead of passing to their beneficiaries as inheritance. Many jurisdictions have determined that the right of survivorship must be specifically claimed by the joint tenants.

For a joint tenancy to exist, the tenants must meet the following four conditions, which are referred to as the “four unities:”

  • Unity of Time: All involved tenants must acquire the property at the same time, meaning simultaneously;
  • Unity of Title: All tenants must have acquired the title by the same document;
  • Unity of Interests: All tenants must hold equal interest in the land, meaning no tenant may own a larger interest than any other; and
  • Unity of Possession: All tenants exercise equal rights to possession, similar to unity of interests.

If any of these are not met, most jurisdictions will presume that a tenancy in common exists as opposed to a joint tenancy. An example of this would be if the tenants all acquired their interests at different times. The Unity of Time would not be fulfilled, and as such, the form of title to real estate will most likely be a tenancy in common.

In terms of joint tenancy ownership rights, the following are distinguishing characteristics of the arrangement:

  • Right of Survivorship: As previously mentioned, each tenant’s share of the property will pass to the other tenants upon their death. It is important to note that this specific right must be stated by the tenants in the title;
  • Avoid Probate: Because the property shares pass to the other tenants under the right of survivorship, the tenants can avoid the costly and lengthy probate process;
  • Equal Use and Possession: Joint tenants are entitled to use and possess the entire property, even though they only own a portion or share of it; and
  • Rights to Rent and Profits: Joint tenants are entitled to a share of any rents and profits that are generated by the land. This is to be in proportion to the percentage of the property that they own.

How Can I Terminate My Joint Tenancy?

In order for a joint tenancy agreement to be terminated, one of the four unities must be destroyed or undone. This can be accomplished by conveying your joint tenancy interest to any third party, such as through gift or sale. Once terminated, a tenancy in common is formed between the third person and any remaining co-tenant(s). A joint tenant may transfer their interest unilaterally, and without the knowledge and/or consent of the co-tenant(s).

If you wish to terminate your joint tenancy while retaining an interest in the property, there are a few options to consider. First, you and your co-tenants can agree to convert the joint tenancy into a tenancy in common.

Second, you may unilaterally transfer your share to a third person, who is acting as a straw-man. This can be done without the knowledge and/or consent of your co-tenant(s). This straw-man transfers your share back to you; however, because the four unities no longer exist, you now own a share as a tenant in common.

States generally allow unilateral conversion of a joint tenancy to a tenancy in common without the use of a straw-man. Additionally, many states now allow for a joint tenant to simply transfer their own interest to themselves. Doing so eliminates the need for a third person to act as a straw-man. It is important to note that some states, such as California, require the severance to be recorded in order for it to be considered valid. An unrecorded severance may reserve a right of survivorship for the non-severing tenant.

Finally, you could seek judicial partition. There are two kinds of partition:

  1. Partition in kind, which refers to the physical division of the land. The court decides how to split up the land between co-tenants so that each person receives a portion equal to their share; and
  2. If the court is unable to equitably split up the land, partition by sale will proceed. According to partition by sale, the court forces the sale of the property and each co-tenant receives their share of the profits.

What Is the Benefit of Terminating My Joint Tenancy and Creating a Tenancy in Common?

According to joint tenancy in real estate laws, when a joint tenancy is terminated, it is transformed into a tenancy in common.

Tenants in common share joint possession of real property. It is a type of real estate title in which more than one person possesses a share of a property, and is formed when the tenants in common have unity of possession. Two or more of the tenants in common each possess a share of the entire property. Shares may or may not be equal; either way, each of the tenants in common is entitled to possess or use the land in its entirety.

All tenants in common are not required to take possession of the property at the same time, unlike joint tenancy. Additionally, there is no right of survivorship in a tenancy in common. Generally speaking, most jurisdictions presume that property that is held by more than one individual is a tenancy in common arrangement. If the type of joint possession of real property is unclear, most courts will assume a tenancy in common arrangement, which can be transferred at any time during the individual’s life. Tenancy in common can also be devised after their death.

The largest advantage associated with terminating your joint tenancy and forming a tenancy in common is that your heirs will receive your share of the property when you die. Doing so will ensure that your share of the property will be inherited by your heirs, instead of going to your co-tenants.

Do I Need a Lawyer to Terminate My Joint Tenancy?

Laws governing joint tenancy and other property issues can vary widely from state to state. Additionally, there are certain qualifying factors that must be met in order for an arrangement to be considered a joint tenancy. If you have any questions regarding joint tenancy, specifically how to terminate your joint tenancy, you should consult with an experienced local property attorney.

An experienced local property lawyer will be best suited to helping you understand your state’s specific laws regarding the joint tenancy matter. Additionally, an attorney can also provide you with advice regarding the best and legal way to terminate your joint tenancy. Finally, an experienced property attorney will also be able to represent you in court as needed, should any legal issues arise.

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