Concurrent Ownership
TABLE OF CONTENT
Contents Page
Introduction …………………………………………………………………………………….4
Definitions
Land…………………………………………………………………………………...…6 Concurrent Ownership………………………………………………………………......6 Real Property……………………………………………………………………………..6
Concurrent Ownership………………………………………………………………................7
Forms of Concurrent Ownerships……………………………………………………………....7 Joint Tenancy……………………………………………………………………………7 Features of Joint Tenancy…………………………………………………….....7 Tenants in Common…………………………………………………………………….8 Features of Tenants in Common……………………………………………….8 Tenancy by Entirety……………………………………………………………………9 Features of Tenancy by Entirety………………………………………………..9
Analysis
Concurrent Ownership……………..…………………………………………….........11 Advantages: Joint Tenants……………..……………………………………………...13 Disadvantages: Joint Tenants.……...………..……………………………………..….13 How Joint Tenants can be terminated………………………………………….14 Advantages of Tenancy in Common……………………………………………………14
Disadvantages of Tenancy in Common …………………………………………….….16 How Tenancy in Common can be terminated………………………………….17
Advantages Tenant by Entirety…………………………………………………………18
Disadvantages Tenant by Entirety…………………………..………………………….19
How tenancy by entirety can be terminated……………………………………19
Comparative Analysis Concurrent Ownership………………………………………………21
Recommendations……………………………………………………………………………...25
Conclusion……………………………………………………………………………………...27
Appendices
Comparison Table of Concurrent Ownership……………………………………….…29
Reference……………………………………………………………………………………….30
INTRODUCTION
The objective of this report is to examine the statement “The same parcel of real estate can be owned by several individuals concurrently”. In discussing this statement, it is imminent that we analyze concurrent ownership and the different types of concurrent ownerships.
According to Laws.com, Concurrent ownership, in real estate and property law, refers to a property that can be owned by more than one person at a given time. It is sometimes also referred to as concurrent estate. The three (3) most common types of concurrent ownership are; 1) Joint Tenancy, 2) Tenancy in Common and 3) Tenancy by the Entirety.
Concurrent ownership can be a great solution for people who want to own a home, especially for first-time buyers. But this can limit one’s rights and options, not only while owning the property, but also when you want to transfer ownership to an heir or to another buyer.
It is important for persons planning on entering into co-ownership to understand these forms of concurrent ownerships and to know the rights and responsibilities of each party involved. Also, there are advantages and disadvantages that the prospective owners will need to consider when entering into a co-ownership agreement.
Each form of concurrent ownership requires a different set of conditions; hence co- owners will have different sets of rights and responsibilities. Some of the factors to consider in concurrent ownership are the right to sell one’s interest in the property to an outside party, the right to will the property and the right of dissolving of co-ownership voluntarily or as a result of death. The right of access is one of the most clearly stated rights that the co-owners have over the property they own. Co-owners are jointly responsible for all the fees associated with owning a property. Some of these fees may include the mortgage payments, taxes, and maintenance fees. These items can be recorded in a written agreement kept between the two co-owners could also entail additional responsibilities. Each party has their own unrestricted access over that property. Should one owner decide to dispossess the other for a period of time, the owner that was kept out is entitled to earnings based on the rental value of the property for the time he was kept absent from it. The type of tenancy/ownership the co-owners are involved in can determine what can and cannot happen to that property in terms of attempted sale of it, or other means of transfer.
DEFINITIONS
Land
Land is defined as “property or real estate, not including buildings or equipment that does not occur naturally”. For one to grasp the full understanding of land one would contemplate the Latin phrase “Cuius est solum ejus est usque ad coelum et ad inferos” which is translated as “for whoever owns the soil, it is theirs up to heaven and down to hell (center of the earth) (duhaime.org/LegalDictionary (2013).
Depending on the title, land ownership may also give the holder the rights to all natural resources on the land (corporeal hereditament). These may include “water, plants, human and animal life, fossils, soil, minerals, electromagnetic features, geographical location, and geophysical occurrences” (Investopedia 2013). Additionally, the title considers more than just the surface of the earth and rights to use the surface, it also includes air rights (rights to use air space above) and sub-surface rights (rights to drill and dig below the surface). Furthermore, title to a parcel of land may often consist of encumbrances, which is any impediment to a clear title such as easement, lien/mortgage and lease.
Real Property
Real property is defined as all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property. Interest in the property may be the right to future ownership (remainder), the right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another 's property.
CONCURRENT OWNERSHIP
According to Jacobus (2010) concurrent ownership refers to the ownership of land by two or more persons at the same time.
The most common forms of concurrent ownership are joint tenancy, tenants in common, and tenants by entirety, community property and tenants in common with cross-contingent remainders. For the purpose of this assignment details will be given on the first three forms of concurrent ownership.
Forms of Concurrent Ownership
Joint Tenancy
According to Jacobus (2010,) joint tenancy is a form of concurrent ownership where upon death of a joint tenant his interest does not descend to his heirs or pass by his will. Rather the entire ownership conveyed to the surviving joint tenant which is the “right of survivorship”.
Features:
For joint tenancy to exist, four (4) unities must be present. This includes the unities of time, title, interest and possession. * Unity of time speaks to the clause the point that each joint tenant must acquire their ownership at the same time. There are no provisions made for new tenants to be added once joint tenancy has been formed. Hence for a new tenant to become part owner within an existing joint tenancy an entirely new agreement would need to be formed between new and existing owners. * Unity of title dictates that joint tenants acquire their interest from the same source such as the same deed or will. * Unity of interest according to Jacobus (2010), “the joint tenants owns one interest together and each joint tenant has exactly the same right in interest” (p. 57). As a result, if one tenant has a fee simple interest in the property, the other tenants must have the same interest in the property for it to be considered joint tenancy. * Unity of possession considers all tenants as owners having an undivided interest in the property. This means that each tenant has rights to the entire property and no tenant automatically owns a specific portion of the property.
Tenants in Common
Jacobus (2010) described tenants in common as ownership of a property by two or more persons who have an undivided interest in the whole property. In other words “each owner has the right to possession of the entire property “(Jacobus, 2010. p.56). None of the owners have any right to any specific portion of the property. Jocobus (2010) added that each owner has the right to sell, mortgage or give away his interest in the property.
Features: * Each tenant in common has a distinct share in property which has not yet been divided among co-tenants. Thus, tenants in common have quite separate interests. The only fact which brings them into co-ownership is that they both have shares in a single property which has not yet been divided among them. While the tenancy in common lasts, no one can say which of them owns any particular parcel of land. * The size of each (co-tenant 's) share is fixed once and for all and is not affected by the death of one of his companions. When a tenant in common dies, his interest passes under his will or intestacy, for his undivided share is his to dispose of as he wishes. * All owners are allowed to use the whole of the property in common with all tenants in common.
Tenancy by Entirety
Jocobus (2010) posited that tenancy by entirety is a form of concurrent ownership specifically for married persons. It takes into consideration the four unities of joint tenancy and an additional unity which is the “unity of person”. Unity of person is based on the legal premise that a husband and a wife are an indivisible legal unit (Jacobus 2010, p. 60). The right of survivorship in this form of ownership the surviving spouse will become the sole owner upon the death of the other. For instance, if Bruce and Portia a married couple and intend to convey their interests in their property, then both signatures are necessary to complete the transaction. Features: * Jacobus (2010) posited that in the event of a divorce, the arrangement changes to tenants in common. This change is automatic, as tenancy by the entirety can only exist in marriage. In addition, the law gives single persons in a (not less than) five year common law relationship the same rights as married persons. Provisions are made for these rights under the Property Rights of Spouse Act 2004 which came into effect on April 1, 2006. A Jamaica Gleaner article (2012) stated that ‘the Act stipulates that property should be shared equally between spouses following a divorce, in which there is separation with no likelihood of reconciliation. Additionally, the Act takes into consideration a wide range of assets including real estate, money, any negotiable instrument or any real or personal property’. Under the Act, each spouse is entitled to 50 percent of the family home, even if it is registered in one person 's name.
* The most significant feature of tenancy by entirety rests in the asset protection afforded by this type of ownership. Under a tenancy by the entirety, the creditors of an individual may not attach or sell his or her spouse’s interest in the residence. Only creditors of the couple may attach and sell the interest in the property owned by tenancy by entirety (i.e. if the couple defaults on the mortgage note, the bank may still foreclose on the property). The enforcement of judgments section of the Illinois Code of Civil Procedures states, in part: any real property held in tenancy by the entirety shall not be liable to be sold upon judgment against only one of the tenants, except if the property was transferred into tenancy by the entirety with the sole intent to avoid the payment of debts existing at the time of the transfer beyond the transferor 's ability to pay those debts as they become due.
ANALYSIS Concurrent Ownership
The Latin Maxim “cuisus est solum eius usque ad coelum et ad inferos” translated ‘he who owns land owns to the sky above it is qualified as between adjoining owners, giving way to a rule of convenience more just, equitable, and beneficial to both parties. A tree standing on the division line between adjoining proprietors, so that the line passes through the trunk or body of the tree above the surface of the soil, is the common property of both proprietors as tenants in common. This is an instance where the maxim, "he who owns land owns to the sky above it," is qualified and made to give way to a rule of convenience more just and equitable, and more beneficial to both parties.
This maxim has been accepted in the legal systems of many nations worldwide. It gives the landowner the right to occupy such space over his land as used by buildings, trees, crops and other physical improvements, in addition to the rights to be protected from interference from third parties in the use and enjoyment of his investment.
According to English law, co-ownership involves joint tenancy, tenancy in common and tenancy by the entirety. For the purpose of this paper, we will seek to give an analysis and highlight the benefits of the three major types of concurrent ownership: joint tenancy, tenancy in common and tenancy by entirety. When two or more persons whether spouses, family members, friend(s) or business partner(s), choose to purchase property, they put significant thought into it, including the property 's value, appearance, and condition, and how they are going to improve the property. They rarely, however, consider how they should take title of the property. Joint Tenancy
Researches have shown that the requirements of joint tenancy involve the four unities. The unity of interest requires that the tenants have interests of the same type and duration; the unity of title required that the tenants all receive their interests through one and the same conveyance; the unity of time requires that all of the interests vest at the same time; and the unity of possession requires that all tenants have an equal right to possess the whole of the estate during the life of the tenant. In other words, joint tenants have the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession. A joint tenancy is a form of joint possession of real property. Joint tenancy is similar to tenancy in common in that certain rights and duties come with joint tenancy, but joint tenancy includes a right of survivorship. A right of survivorship means that if a joint tenant dies, their interest in the land passes to the other joint tenant(s). The surviving joint tenant(s) have a right to the whole estate. Thus, when a joint tenant dies, they may not pass their share on to their heirs. Joint tenants are entitled to possess and use the entire property, even though they only own a share of it.
In order for a joint tenancy to exist four unities must be met * All tenants acquired the property at the same time; * All tenants have an equal interest in the property; * All tenants acquired title by the same deed or will; and * All tenants have an equal right to possession.
Advantages of Joint Tenancy * Right of Survivorship: As a joint tenant, you have the right to a proportionate share of the property in the event that one of the joint tenants becomes deceased. This is probably the main advantage of joint tenancy as opposed to other forms of joint possession of real property (such as tenancy in common). * Tax Benefits: Joint tenancy may allow the owners to obtain various tax benefits. * Rights to Rent: Joint tenants are entitled to their proportional share of rents paid by third parties. This is true regardless of the joint owners’ relation to the renters. * Rights to Profits: Joint owners are also entitled to a proportional share of any profits that may be derived from the land. This includes the discovery of natural resources such as oil, minerals, or gas. They are also entitled to any commercial profits or revenue. * Avoiding Probate: Since the share of property will pass to the other joint owners, this can help avoid the probate process upon the death of one of the tenants.
Disadvantages of Joint Tenancy * Increased Level of Responsibility: Joint tenants must pay their proportionate share of taxes, mortgage payments, and any other assessments related to the property. * Duty to Compensate: A joint tenant also has the duty to make compensations to other owners for any waste that they commit against the land or property. * Maintenance and Repairs: Joint owners are liable for their proportional share of necessary costs for repairs and maintenance to the property. * No Inheritance Rights: If one joint tenant dies, the property title is transferred to the surviving joint tenants. Thus, a joint tenant may not be able to transfer property interests to their children or other family members through inheritance.
How joint tenancy can be terminated
In order to terminate a joint tenancy, one of the four unities must be destroyed. You may do this by: * Conveying your joint tenancy interest to any third person. This can be done through gift or sale. Upon termination, a tenancy in common is formed between the third person and the remaining co-tenant(s). * A joint tenant may transfer their interest unilaterally and without the knowledge or consent of the co-tenant(s). * Tenants in Common
Tenants in Common is a form of real estate title wherein more than one person possess a share of the property. The persons who own portions of the property are called “tenants in common”. Tenants in common is a widely used form of joint possession of real property. Most jurisdictions presume that property being held by more than one person is a tenancy in common arrangement.
A tenants in common is formed once the tenants in common have unity of possession; that is, they share the property together. They do not all have to take possession at the same time. Unlike a joint tenancy, there is no “right of survivorship” in a tenancy in common.
Advantages of Tenants in Common * Passing on Ownership: One of the best advantages of entering into tenants in common agreement is that you can pass on your portion of property ownership rights, whether it be the rights over a specific space or time--to family or friends after you die. According to This is Money, with traditional joint-tenancy arrangements, the surviving co-owner gains ownership rights over the entire property in the event of the other co-owner’s death. Thus, tenants in common allow you to keep a property in the family even after you die. * Maximize Buying Power: According to Sirkin and Associates, when you enter into a tenants in common agreement, you pool your money with another co-owner, which increases your overall buying power. Instead of using a $50,000 investment to buy a small, one-level house, you can combine your cash with a matching investment from a partner and purchase a much larger, multi-floor, two-family house. This will allow you a lot more flexibility if you are trying to get into a particular neighborhood or area. * Maximize Selling Power: In addition to maximizing your buying power on the real estate market, a tenant in common co-ownership can also increase your selling power. This is because when you divide a property, you will likely be able get more money selling the individual portions to different buyers, as opposed to selling the entire property to a single buyer. * Low Risk: In a traditional joint-tenancy arrangement, both co-owners must contribute to a single mortgage covering the entire property (if taking one out is necessary). This means if one co-owner bails on the agreement, or dies the other co-owner becomes solely responsible for the property’s mortgage. With a tenants in common agreement, co-owners can take out separate, smaller loans to cover individual sections of property. This means you will never be stuck with more debt than you could anticipate. In addition, tenants in common allows you to more easily get out of a partnership if you no longer wish to co-own a property, as you can sell your portion of the rights whenever you want.
Disadvantages of Tenants in Common * Inheritance Issues: In a traditional joint-ownership agreement, when one co-owner dies, the surviving owner takes over the entire property. As mentioned above, a tenants-in-common agreement makes it possible for you to bypass this scenario, and let family or friends inherit your shares. However, according to Arctic.org, this process is not always as smooth as it sounds. For example, inheritors must first pay Probate court costs in order to verify the will of the deceased before they can claim ownership of their shares. In addition, there could be unpleasantness between the surviving co-owner and the new co-owner if they disagree on how to care for the property and other issues. * Forcing Sales: While a tenant in common is suppose to provide co-owners with flexibility and independence, meaning that each owner can sell his portion of the property whenever he wants, and can remain an owner of that portion for as long as he wants; this is not always the case. If one co-owner wants to sell the entire property, he can file a partition lawsuit. If the lawsuit passes, the court will order that the house be sold, and the other co-owner, even if unwilling will have to forfeit ownership and receive a portion of the sale proceeds. * Resale: Part of the reason why one co-owner in a tenants-in-common agreement may want to sell an entire property, instead of just the portion he owns, is because of poor resale value. * IRS/TAX Concerns: According to Sirkin and Associates, limited liability companies (LLCs) are co-ownership agreements that provide a high degree of liability and management protection, meaning each co-owner has minimal financial responsibility if something goes wrong. However, depending on the state, LLCs can face increased taxation, which is why some people turn to tenants-in-common agreements to avoid that. The problem with this strategy is that the IRS may still treat your tenants-in-common agreement as an LLC or other type of legal partnership and tax you accordingly, especially if you and a spouse or another family member are the co-owners.
How can Tenants in Common be terminated?
A tenancy in common may be terminated in three ways: * By an agreement between all of the tenants in common; * By a judge, ordering partition (either a physical division of the land or a partition by sale); and * By ouster - which means any act that unlawfully deprives a tenant in common of their share of the property.
Tenancy by Entirety
Tenancy by entirety is where married couples can hold the title to a property. In order for one spouse to modify his or her interest in the property in any way, the consent of both spouses is required by tenants by entirety. It also provides that when one spouse passes away, the surviving spouse gains full ownership of the property. A married couple may choose to create a joint tenancy or a tenancy in common. A married couple is presumed to take title to property as tenants by the entirety, unless the deed or conveyancing document states otherwise.
This form of co-ownership has been in existence for several years now. However, many attorneys were reluctant to utilize this method of holding title until the case law clarifies the advantages and disadvantages.
Advantages of Tenancy by Entirety * Each rights: to enjoy and possess the property, that is jointly owned by them a tenancy in entirety. Only real property comes under the ambit of this provision, but, in some cases, even personal property is found to be included. * Right of survivorship: Tenancy by entirety have right of survivorship on each spouse. This means, on the death of one spouse, the other is entitled to the entire interest in the whole property. * Shield against creditors: One of the greatest advantages of tenancy by entirety is that this type of concurrent estate can be a protective shield against creditors of any one spouse. In other words, the creditors cannot touch a jointly held property as a tenancy by entirety. * Conveyance of Mortgage: Protects against one spouse conveying or mortgaging the couple’s property without the consent of the other. * Legal Issues: Couples own property by entirety, which means a successful lawsuit against one spouse, will not put a lien on the house. Tenancy by entirety provides homestead protection in the event of a judgment against either spouse. Through this form of co-ownership there are no probate delays in the event of death of one spouse; the right of survivorship makes the surviving spouse the immediate sole owner. The surviving spouse becomes sole owner in severalty. The term severalty indicates that the sole owner is severed, or cut off, from other owners. * Forced sale protection: It provides some protection against forced sale of jointly held property to satisfy a debt judgment against one of the spouse.
Disadvantages of Tenancy by Entirety * No Protection: It provides for no one except the surviving spouse * Tax Problems: It may create estate tax problems * Will: It does not replace the need for a will to direct how couples personal property shall be disposed.
How Tenancy by Entirety can be terminated * Court Termination: A tenancy by entirety can be terminated through a court-ordered sale to satisfy a claim against both spouses as joint debtors. This form of ownership is also terminated through divorce as there is no longer a marriage unit for the property to belong to. * Other Termination: Through agreement of both parties, the tenancy by entirety may also be terminated. To complete this, a new deed must be conveyed that indicates the new form of ownership for the property. However, the parties cannot unilaterally make any decision to sell or divide the property or to end the tenancy or to dispose of the property by will.
Comparative Analysis
The most important difference between a tenancy by entirety and a joint tenancy or tenancy in common is that a tenant by entirety may not sell or give away his interest in the property without the consent of the other tenant. Upon the death of one of the spouses, the deceased spouse 's interest in the property entrust to the surviving spouse, and not to other heirs of the deceased spouse. This is called the right of survivorship.
There are several rights which are enjoyed by the co-owners. All owners have equal rights to possess the property; each owner has the right to sell his interest in the property.
Joint tenancy is based primarily on survivorship, which means that upon the death (intestate) of one of the joint tenant, the surviving tenant(s) will possess the entire estate. The incidence of survivorship would seem to be very unfair when one considers the entitlements of the heirs of the deceased joint tenant. This created numerous feuds in both the English and American courts. As stated earlier, as long as the four unities were present at the time of death, joint tenancy would be held by the surviving tenants. Providing that any one of the unities were absent at the time of death, a tenancy in common would be created. However, according to English law, joint tenancy can be converted into a tenancy in common through very simple means.
Conversely, joint tenancy can assist with avoiding Probate. Providing that an individual dies, his or her will is reviewed by a Probate court. The court will determine the validity and legality of the will and the assets and liabilities the deceased had. After all outstanding debts have been settled, the remaining assets will be distributed to the surviving heir(s). This can be a tedious process, taking months or even years especially when handling complicated estates. While, joint tenancy with survivorship, avoids probate; it automatically transfers ownership to the surviving spouse or business partner upon the death of the first partner. As one can imagine, this is an enormous advantage for those who need the funds immediately especially for funeral expenses. The Probate court has the right to freeze the account of the deceased to avoid it being liquidated by spouse or business partner. Normally, this action of the court would out of a dispute over whether the surviving spouse or business partner actually contributed to the account.
According to the UK Land Registry, a simple notice of severance from the joint tenancy would make any person relieved from the joint tenancy. A severance by notice is the most cost benefit analysis. This severance would be an agreement by the co-owners. One co-owner would give notice to the other(s) of his intention to do so. It stated that the party, who seeks to sever, would give up his right to joint tenancy and forego the right of survivorship. Another way of severing a joint tenancy is the right of one co-owner to transfer or mortgage his interest in the property to a third party. There is a Supreme Court decision - Gamble v Hankle - which demonstrates that a transfer from one joint tenant to a third party without the consent of the other joint holder is likely to be upheld and is adequate to sever a joint tenancy.
There are some instances in which the court may find that one joint tenant has lost his interest in the property and loses his right to acquire the entire property upon the death of the co-tenant. This was highlighted in the case of Wills v Wills (2004), a decision of the Privy Council in an appeal from the Jamaican Court of Appeal. The Privy Council ruled “that because of Elma’s total exclusion from the properties and as a result, George used those properties as if he was the sole owner except for sharing his occupation and enjoyment with his wife, Myra; Elma had discontinued her possession or had been dispossessed for a period exceeding the legally ample time of twelve years; which George was held to have acquired sole possession by adverse possession. If she had wished to maintain her interest in the properties, she could have sought to have the properties sold or rearranged their ownership by an exchange of beneficial interests or even obtain a proper written acknowledgement of title”.
Unlike joint tenant, the interest of tenancy in common does not terminate upon the death of a party. Tenancy in common often has unequal interests and/or unequal rights in the property, often owing to the amount contributed to the purchase price. This is common between husband and wife, parent(s) and child, or other persons. With tenancy in common, each owner owns a percentage or a fraction of the asset acquired. The interest might be unequal such that one co-owner could have as much as three-quarters interest in the property. Having the greater stake in the property does not mean that one has the right to exclude others who own smaller shares from occupying the property. In addition, each owner has the right to receive a prorated share of the rents profits that accrued from leasing or selling the property respectively held in tenancy in common.
Also, each party has the legal right to sell his or her portion of the asset without approval or consent from the other parties involved. This form of co-ownership gives the owner more freedom.
The tenant in common can transfer his share or upon death the share will be passed onto his heirs, as unity of title is not required. This is similar to the Dayabhaga coparcenery theory (Hindu). Coparcenery is a narrower body of persons within a joint family and consists of father, sons, sons’ of sons and sons, son’s son. A coparcener has an interest by birth in the joint family property; every coparcener has the right to be in the possession and enjoyment of the joint family property; and every coparcener has the right to be maintained including a right of marriage expenses being defrayed out of joint family funds. As indicated in the facts of the case Wills v Wills (2004), George offered her $25,000 for her share in the properties. She said she did not accept the offer because it was too low and she had hoped to own the properties as the survivor, so she wanted him to enjoy the rent from the properties and she did not want to deprive him of a roof over his head.
In the case of Sawada v. Endo – Case Brief in the Court of Appeals New York, Dated: 1977. The Parties: Sawada- Plaintiff, Appellant, Injured party and Sam and Toru Endo- Defendant, Appellee, Conveyed land by father, Kokichi Endo- Father, Ume Endo- Mother; Cause of Action and Remedy: The following is a civil action seeking to set aside a conveyance of real property from judgment debtor husband Endo to his sons. “Any real property held in tenancy by the entirety shall not be liable to be sold upon judgment against only one of the tenants, except if the property was transferred into tenancy by the entirety with the sole intent to avoid the payment of debts existing at the time of the transfer beyond the transferor 's ability to pay those debts as they become due”.
Where the judgment held that: “a tenancy by the entireties is subject to levy and execution by creditors when there is are outstanding Judgments for personal injury and the property was conveyed because under the Married Women 's Property Acts, the interest of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouses. Furthermore, the conveyance of the marital property was not in fraud of the judgment creditors”.
Recommendations
Law makers should revisit the way in which concurrent ownership is executed, whether more autonomy should be given to some aspect of concurrent ownership and whether other sections may be reduced by removing some of the power given.
There are aspects of the concurrent ownership which seem to need some amount of revamping in how assets are transferred and the requirement for intestate during a probate of a will. Also, the regard for creating mutual, equitable and just agreement during the loss or transfer of property.
In the case of a joint tenancy, since all tenants acquired the property at the same time, all tenants have an equal interest in the property; all tenants acquired title by the same deed or will; and all tenants have an equal right to possession. It is only reasonable that in the event of sale all tenants should agree to sell. It should not be that you can convey your joint tenancy interest to any third person without the knowledge of the co-tenant (s) as in the case of Gamble v Hankle. If a party of a joint tenancy wants to transfer his stake in the joint ownership then all party should either agree or through court of law apply for such privilege. This undermines the true purpose of joint tenancy. The facts of the case Gamble v Hankle are of particular interest. The property in question was owned by husband and wife as joint tenants. The husband died in 1981 and the wife claimed ownership of the entire property in accordance with the principle of survivorship. She then tried to evict Hankle from the property. (McGregor, 2009).
A copy of a deed of gift dated November 21, 1980, was tendered into evidence showing that the husband had purported to transfer his interest in the property to Hankle. The wife argued that the deed was ineffective to transfer the husband 's interest in the property to Hankle (McGregor, 2009).
This in fact, defeats the purpose of the joint tenancy by allowing one co-owner to transfer without the knowledge of the other. If one can purport to transfer ones joint ownership then it makes sense choosing a tenancy in common. There is, therefore, no real security enjoyed by a joint tenant that the entire property will belong to him or her after the co-owner dies, because each co-owner has a right to take such action as will be effective to sever the joint tenancy during his or her lifetime.
Reasonable steps should be taken to inform property owners of their responsibilities and rights regarding to concurrent ownership. Such responsibilities should speak to payment of taxes, because government makes no little pronouncement about it, but more so, to ensure that one plays the necessary role to secure one’s property from any encroachment and adverse possession. Whenever there is any separation in relationship the necessary steps are taken by the person(s) in possession of property to advertise their intent of taking the property through adverse possession, if other co-tenant(s) fails to show interest in same property.
As mentioned in the case of Wills v Wills (2004) the plaintiff was not involved in the collection of rent neither did she communicate any instruction as it relates to the rent collection or the property in question. But ignored all transaction including property the trial judge used these evidence to grant the defendant adverse possession of the property.
Tenants in common is recommended for small and medium size businesses, as it is the best way to pool resources together without fear of losing one’s personal share in a property. This way, if one tenant defaults on his or her loan the other tenant(s) have their own titles for their share of the property and will be responsible for their own debt.
Conclusion
Concurrent ownership is substantially more than just owning a property with others, it is more than just finding a partner to co-tenant and ease the burden of having to purchase a property all by oneself. It entails carefully analyzing the pro and cons, looking meticulously into the concurrent ownership features, advantages and disadvantages. The fact that the same parcel of land can be owned by several individuals concurrently may force a co-owner into a precarious position.
Though it is the solution of choice for many first time home owners, it has also severed and left many first time home owners in distress; mainly because they did not carefully analyzed each aspect of concurrent ownership. This is why it is essential to understand the various forms of concurrent ownership as applicable to one’s situation.
Joint tenancy has been the choice for many married home owners in Jamaica and has the benefit of the right of survivorship, therefore in the event of death, the surviving party gain fee simple ownership of the property and is free of all encumbrances as stipulated by law. This is important in protecting the surviving spouse from any impediment. Of note, are the unities which describe a joint tenancy, with removing one or more of the unities as joint tenancy and tenancy in common. There are certain benefits which are derived through taxes when choosing a joint tenancy. At the death of one joint tenant there is no need for probate as the property passes on the surviving tenants. However, one must be cognizant of one’s responsibility under joint tenancy.
Tenancy in common, is the more sought after by singles, business partners, common law relationships and children of property owners. This gives co-owners more freedom of choice to decide what is to be done with their share of property and how to dispose of property without the knowledge or intervention of other tenants in common. As the name suggest, they all share “common” in the property, they have unison of possession, no matter the percentage share. Nevertheless, a co-tenant can get a force order for the property to be sold.
Tenancy in entirety is somehow similar to joint tenancy but yet differ in some aspect of it. Tenancy in entirety is binding to what is stated in the deed and one party cannot make a decision to the property without the consent of the other. This concurrent ownership is mainly used by married couples, it protects co-owners from creditors taking lien on the property if there was a breech by one co-tenant, without the consent of the other.
Importantly, all the concurrent ownerships; joint tenancy, tenancy in common and tenancy by entirety have their advantages and disadvantages, their benefits and losses their features and requirements. The questions one may ask: are you prepared to tolerate a co-owner who has undivided rights in your property? Are you prepared to live with someone who will put a lien on your property without consulting you? Or are you permitted to transfer your property to the heir of your choice? Or should you purchase a property that was willed to people you have little in common with? It is clear that potential concurrent owners are required to answer these questions before they make the decision to purchase.
APPENDIX
COMPARISON TABLE
Joint Tenancy | Tenants in Common | Tenancy by Entirety | Right of survivorship | No right of survivorship | Right of survivorship | Unities of time, title interest and possession | Separate titles | Unities of time, title, interest, possession and marriage | Two (2) or more persons are eligible | Two (2) or more persons are eligible | Applicable exclusively married persons | Undivided interest | Undivided interest | Undivided interest | Equal responsibilities: all tenants are equally responsible for the liabilities of the property (taxes) | Prospective co-owners are faced with various uncertainties | Protected by against foreclosure |
REFERENCES
Information used and cited in this research paper was taken from the following credible sources:
* Gayle, B (December 7, 2003). Understanding the Limitations of Actions Act. The Jamaica Gleaner. Retrieved from http://jamaica-gleaner.com/gleaner/20031207/focus/focus2.html * Glen, C (June 7, 2012). The Benefits and Pitfalls of Joint Tenancy. Investopedia. Retrieved from http://www.investopedia.com/articles/pf/08/joint-tenancy.asp. * Jacobus C. J (2010). Real Estate Principles 11th Edition. 5190 Natorp Boulevard, Mason, OH 45040 USA. * Laws.com - Background on Concurrent Ownerships. Retrieved from http://real-estate.laws.com/concurrent-ownership. * Laws.com -Real Estate. Retrieved from http://real-estate.laws.com/concurrent-ownership/ownership-definition. * Legal Dictionary (2013). Duhaime.org. Retrieved from http://www.duhaime.org/LegalDictionary/C/CuiusEstSolumEjusestUsqueAdCoelumetadInferos.aspx * Macaulay, M (February 23, 2004). The Property (Rights of Spouse Act) 2004. The Jamaica Observer. Retrieved from http://www.jamaicaobserver.com/magazines/allwoman/56103_The-Property--Rights-of-Spouses--Act-2004 * McGregor, S (June 8, 2009). Laws of Eve – Avoiding the incidence of Joint Tenancy. The Jamaica Gleaner. Retrieved from http://jamaica- gleaner.com/gleaner/20090608/flair/flair9.html * Nicholson, A. (Q.C.) ( ). The Family Property (Rights of Spouses) Act, 2003. The Jamaica Information Service. Retrieved from http://www.jis.gov.jm/special_sections/Bills%20&%20Acts/pdf/TheFamilyPropertyAct.pdf * Prof (Dr.) Kumar, V. Hindu Law of Coparcenary and its Composition (PowerPoint Slide). Scribd.com. Retrieved from http://www.scribd.com/doc/33115992/2-Hindu-Law-of-Coparcenary-and-Its-Composition * The Privy Council (December 1, 2003). Retrieved from http://www.ipsofactoj.com/international/2004/Part07/int2004(7)-003.htm. * Yuheda, A. Law Journal (PDF). The Maxim “CUISUS EST SOLUM EIUS USQUE AD COELUM” is a presumption rebuttable by circumstance. Retrieved from http://lawjournal.mcgill.ca/documents/8/4/abramovitch.pdf
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[ 1 ]. Scribd.com
[ 2 ]. http://www.ipsofactoj.com. Privy Council 1 December 2003
References: Information used and cited in this research paper was taken from the following credible sources: * Gayle, B (December 7, 2003) * Glen, C (June 7, 2012). The Benefits and Pitfalls of Joint Tenancy. Investopedia. Retrieved from http://www.investopedia.com/articles/pf/08/joint-tenancy.asp. * Jacobus C * Legal Dictionary (2013). Duhaime.org. Retrieved from http://www.duhaime.org/LegalDictionary/C/CuiusEstSolumEjusestUsqueAdCoelumetadInferos.aspx * Macaulay, M (February 23, 2004) * McGregor, S (June 8, 2009). Laws of Eve – Avoiding the incidence of Joint Tenancy. The Jamaica Gleaner. Retrieved from http://jamaica- gleaner.com/gleaner/20090608/flair/flair9.html * Nicholson, A * Prof (Dr.) Kumar, V. Hindu Law of Coparcenary and its Composition (PowerPoint Slide). Scribd.com. Retrieved from http://www.scribd.com/doc/33115992/2-Hindu-Law-of-Coparcenary-and-Its-Composition * The Privy Council (December 1, 2003)
Contents Page
Introduction …………………………………………………………………………………….4
Definitions
Land…………………………………………………………………………………...…6 Concurrent Ownership………………………………………………………………......6 Real Property……………………………………………………………………………..6
Concurrent Ownership………………………………………………………………................7
Forms of Concurrent Ownerships……………………………………………………………....7 Joint Tenancy……………………………………………………………………………7 Features of Joint Tenancy…………………………………………………….....7 Tenants in Common…………………………………………………………………….8 Features of Tenants in Common……………………………………………….8 Tenancy by Entirety……………………………………………………………………9 Features of Tenancy by Entirety………………………………………………..9
Analysis
Concurrent Ownership……………..…………………………………………….........11 Advantages: Joint Tenants……………..……………………………………………...13 Disadvantages: Joint Tenants.……...………..……………………………………..….13 How Joint Tenants can be terminated………………………………………….14 Advantages of Tenancy in Common……………………………………………………14
Disadvantages of Tenancy in Common …………………………………………….….16 How Tenancy in Common can be terminated………………………………….17
Advantages Tenant by Entirety…………………………………………………………18
Disadvantages Tenant by Entirety…………………………..………………………….19
How tenancy by entirety can be terminated……………………………………19
Comparative Analysis Concurrent Ownership………………………………………………21
Recommendations……………………………………………………………………………...25
Conclusion……………………………………………………………………………………...27
Appendices
Comparison Table of Concurrent Ownership……………………………………….…29
Reference……………………………………………………………………………………….30
INTRODUCTION
The objective of this report is to examine the statement “The same parcel of real estate can be owned by several individuals concurrently”. In discussing this statement, it is imminent that we analyze concurrent ownership and the different types of concurrent ownerships.
According to Laws.com, Concurrent ownership, in real estate and property law, refers to a property that can be owned by more than one person at a given time. It is sometimes also referred to as concurrent estate. The three (3) most common types of concurrent ownership are; 1) Joint Tenancy, 2) Tenancy in Common and 3) Tenancy by the Entirety.
Concurrent ownership can be a great solution for people who want to own a home, especially for first-time buyers. But this can limit one’s rights and options, not only while owning the property, but also when you want to transfer ownership to an heir or to another buyer.
It is important for persons planning on entering into co-ownership to understand these forms of concurrent ownerships and to know the rights and responsibilities of each party involved. Also, there are advantages and disadvantages that the prospective owners will need to consider when entering into a co-ownership agreement.
Each form of concurrent ownership requires a different set of conditions; hence co- owners will have different sets of rights and responsibilities. Some of the factors to consider in concurrent ownership are the right to sell one’s interest in the property to an outside party, the right to will the property and the right of dissolving of co-ownership voluntarily or as a result of death. The right of access is one of the most clearly stated rights that the co-owners have over the property they own. Co-owners are jointly responsible for all the fees associated with owning a property. Some of these fees may include the mortgage payments, taxes, and maintenance fees. These items can be recorded in a written agreement kept between the two co-owners could also entail additional responsibilities. Each party has their own unrestricted access over that property. Should one owner decide to dispossess the other for a period of time, the owner that was kept out is entitled to earnings based on the rental value of the property for the time he was kept absent from it. The type of tenancy/ownership the co-owners are involved in can determine what can and cannot happen to that property in terms of attempted sale of it, or other means of transfer.
DEFINITIONS
Land
Land is defined as “property or real estate, not including buildings or equipment that does not occur naturally”. For one to grasp the full understanding of land one would contemplate the Latin phrase “Cuius est solum ejus est usque ad coelum et ad inferos” which is translated as “for whoever owns the soil, it is theirs up to heaven and down to hell (center of the earth) (duhaime.org/LegalDictionary (2013).
Depending on the title, land ownership may also give the holder the rights to all natural resources on the land (corporeal hereditament). These may include “water, plants, human and animal life, fossils, soil, minerals, electromagnetic features, geographical location, and geophysical occurrences” (Investopedia 2013). Additionally, the title considers more than just the surface of the earth and rights to use the surface, it also includes air rights (rights to use air space above) and sub-surface rights (rights to drill and dig below the surface). Furthermore, title to a parcel of land may often consist of encumbrances, which is any impediment to a clear title such as easement, lien/mortgage and lease.
Real Property
Real property is defined as all land, structures, firmly attached and integrated equipment (such as light fixtures or a well pump), anything growing on the land, and all "interests" in the property. Interest in the property may be the right to future ownership (remainder), the right to occupy for a period of time (tenancy or life estate) the right to drill for oil, the right to get the property back (a reversion) if it is no longer used for its current purpose (such as use for a hospital, school or city hall), use of airspace (condominium) or an easement across another 's property.
CONCURRENT OWNERSHIP
According to Jacobus (2010) concurrent ownership refers to the ownership of land by two or more persons at the same time.
The most common forms of concurrent ownership are joint tenancy, tenants in common, and tenants by entirety, community property and tenants in common with cross-contingent remainders. For the purpose of this assignment details will be given on the first three forms of concurrent ownership.
Forms of Concurrent Ownership
Joint Tenancy
According to Jacobus (2010,) joint tenancy is a form of concurrent ownership where upon death of a joint tenant his interest does not descend to his heirs or pass by his will. Rather the entire ownership conveyed to the surviving joint tenant which is the “right of survivorship”.
Features:
For joint tenancy to exist, four (4) unities must be present. This includes the unities of time, title, interest and possession. * Unity of time speaks to the clause the point that each joint tenant must acquire their ownership at the same time. There are no provisions made for new tenants to be added once joint tenancy has been formed. Hence for a new tenant to become part owner within an existing joint tenancy an entirely new agreement would need to be formed between new and existing owners. * Unity of title dictates that joint tenants acquire their interest from the same source such as the same deed or will. * Unity of interest according to Jacobus (2010), “the joint tenants owns one interest together and each joint tenant has exactly the same right in interest” (p. 57). As a result, if one tenant has a fee simple interest in the property, the other tenants must have the same interest in the property for it to be considered joint tenancy. * Unity of possession considers all tenants as owners having an undivided interest in the property. This means that each tenant has rights to the entire property and no tenant automatically owns a specific portion of the property.
Tenants in Common
Jacobus (2010) described tenants in common as ownership of a property by two or more persons who have an undivided interest in the whole property. In other words “each owner has the right to possession of the entire property “(Jacobus, 2010. p.56). None of the owners have any right to any specific portion of the property. Jocobus (2010) added that each owner has the right to sell, mortgage or give away his interest in the property.
Features: * Each tenant in common has a distinct share in property which has not yet been divided among co-tenants. Thus, tenants in common have quite separate interests. The only fact which brings them into co-ownership is that they both have shares in a single property which has not yet been divided among them. While the tenancy in common lasts, no one can say which of them owns any particular parcel of land. * The size of each (co-tenant 's) share is fixed once and for all and is not affected by the death of one of his companions. When a tenant in common dies, his interest passes under his will or intestacy, for his undivided share is his to dispose of as he wishes. * All owners are allowed to use the whole of the property in common with all tenants in common.
Tenancy by Entirety
Jocobus (2010) posited that tenancy by entirety is a form of concurrent ownership specifically for married persons. It takes into consideration the four unities of joint tenancy and an additional unity which is the “unity of person”. Unity of person is based on the legal premise that a husband and a wife are an indivisible legal unit (Jacobus 2010, p. 60). The right of survivorship in this form of ownership the surviving spouse will become the sole owner upon the death of the other. For instance, if Bruce and Portia a married couple and intend to convey their interests in their property, then both signatures are necessary to complete the transaction. Features: * Jacobus (2010) posited that in the event of a divorce, the arrangement changes to tenants in common. This change is automatic, as tenancy by the entirety can only exist in marriage. In addition, the law gives single persons in a (not less than) five year common law relationship the same rights as married persons. Provisions are made for these rights under the Property Rights of Spouse Act 2004 which came into effect on April 1, 2006. A Jamaica Gleaner article (2012) stated that ‘the Act stipulates that property should be shared equally between spouses following a divorce, in which there is separation with no likelihood of reconciliation. Additionally, the Act takes into consideration a wide range of assets including real estate, money, any negotiable instrument or any real or personal property’. Under the Act, each spouse is entitled to 50 percent of the family home, even if it is registered in one person 's name.
* The most significant feature of tenancy by entirety rests in the asset protection afforded by this type of ownership. Under a tenancy by the entirety, the creditors of an individual may not attach or sell his or her spouse’s interest in the residence. Only creditors of the couple may attach and sell the interest in the property owned by tenancy by entirety (i.e. if the couple defaults on the mortgage note, the bank may still foreclose on the property). The enforcement of judgments section of the Illinois Code of Civil Procedures states, in part: any real property held in tenancy by the entirety shall not be liable to be sold upon judgment against only one of the tenants, except if the property was transferred into tenancy by the entirety with the sole intent to avoid the payment of debts existing at the time of the transfer beyond the transferor 's ability to pay those debts as they become due.
ANALYSIS Concurrent Ownership
The Latin Maxim “cuisus est solum eius usque ad coelum et ad inferos” translated ‘he who owns land owns to the sky above it is qualified as between adjoining owners, giving way to a rule of convenience more just, equitable, and beneficial to both parties. A tree standing on the division line between adjoining proprietors, so that the line passes through the trunk or body of the tree above the surface of the soil, is the common property of both proprietors as tenants in common. This is an instance where the maxim, "he who owns land owns to the sky above it," is qualified and made to give way to a rule of convenience more just and equitable, and more beneficial to both parties.
This maxim has been accepted in the legal systems of many nations worldwide. It gives the landowner the right to occupy such space over his land as used by buildings, trees, crops and other physical improvements, in addition to the rights to be protected from interference from third parties in the use and enjoyment of his investment.
According to English law, co-ownership involves joint tenancy, tenancy in common and tenancy by the entirety. For the purpose of this paper, we will seek to give an analysis and highlight the benefits of the three major types of concurrent ownership: joint tenancy, tenancy in common and tenancy by entirety. When two or more persons whether spouses, family members, friend(s) or business partner(s), choose to purchase property, they put significant thought into it, including the property 's value, appearance, and condition, and how they are going to improve the property. They rarely, however, consider how they should take title of the property. Joint Tenancy
Researches have shown that the requirements of joint tenancy involve the four unities. The unity of interest requires that the tenants have interests of the same type and duration; the unity of title required that the tenants all receive their interests through one and the same conveyance; the unity of time requires that all of the interests vest at the same time; and the unity of possession requires that all tenants have an equal right to possess the whole of the estate during the life of the tenant. In other words, joint tenants have the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same undivided possession. A joint tenancy is a form of joint possession of real property. Joint tenancy is similar to tenancy in common in that certain rights and duties come with joint tenancy, but joint tenancy includes a right of survivorship. A right of survivorship means that if a joint tenant dies, their interest in the land passes to the other joint tenant(s). The surviving joint tenant(s) have a right to the whole estate. Thus, when a joint tenant dies, they may not pass their share on to their heirs. Joint tenants are entitled to possess and use the entire property, even though they only own a share of it.
In order for a joint tenancy to exist four unities must be met * All tenants acquired the property at the same time; * All tenants have an equal interest in the property; * All tenants acquired title by the same deed or will; and * All tenants have an equal right to possession.
Advantages of Joint Tenancy * Right of Survivorship: As a joint tenant, you have the right to a proportionate share of the property in the event that one of the joint tenants becomes deceased. This is probably the main advantage of joint tenancy as opposed to other forms of joint possession of real property (such as tenancy in common). * Tax Benefits: Joint tenancy may allow the owners to obtain various tax benefits. * Rights to Rent: Joint tenants are entitled to their proportional share of rents paid by third parties. This is true regardless of the joint owners’ relation to the renters. * Rights to Profits: Joint owners are also entitled to a proportional share of any profits that may be derived from the land. This includes the discovery of natural resources such as oil, minerals, or gas. They are also entitled to any commercial profits or revenue. * Avoiding Probate: Since the share of property will pass to the other joint owners, this can help avoid the probate process upon the death of one of the tenants.
Disadvantages of Joint Tenancy * Increased Level of Responsibility: Joint tenants must pay their proportionate share of taxes, mortgage payments, and any other assessments related to the property. * Duty to Compensate: A joint tenant also has the duty to make compensations to other owners for any waste that they commit against the land or property. * Maintenance and Repairs: Joint owners are liable for their proportional share of necessary costs for repairs and maintenance to the property. * No Inheritance Rights: If one joint tenant dies, the property title is transferred to the surviving joint tenants. Thus, a joint tenant may not be able to transfer property interests to their children or other family members through inheritance.
How joint tenancy can be terminated
In order to terminate a joint tenancy, one of the four unities must be destroyed. You may do this by: * Conveying your joint tenancy interest to any third person. This can be done through gift or sale. Upon termination, a tenancy in common is formed between the third person and the remaining co-tenant(s). * A joint tenant may transfer their interest unilaterally and without the knowledge or consent of the co-tenant(s). * Tenants in Common
Tenants in Common is a form of real estate title wherein more than one person possess a share of the property. The persons who own portions of the property are called “tenants in common”. Tenants in common is a widely used form of joint possession of real property. Most jurisdictions presume that property being held by more than one person is a tenancy in common arrangement.
A tenants in common is formed once the tenants in common have unity of possession; that is, they share the property together. They do not all have to take possession at the same time. Unlike a joint tenancy, there is no “right of survivorship” in a tenancy in common.
Advantages of Tenants in Common * Passing on Ownership: One of the best advantages of entering into tenants in common agreement is that you can pass on your portion of property ownership rights, whether it be the rights over a specific space or time--to family or friends after you die. According to This is Money, with traditional joint-tenancy arrangements, the surviving co-owner gains ownership rights over the entire property in the event of the other co-owner’s death. Thus, tenants in common allow you to keep a property in the family even after you die. * Maximize Buying Power: According to Sirkin and Associates, when you enter into a tenants in common agreement, you pool your money with another co-owner, which increases your overall buying power. Instead of using a $50,000 investment to buy a small, one-level house, you can combine your cash with a matching investment from a partner and purchase a much larger, multi-floor, two-family house. This will allow you a lot more flexibility if you are trying to get into a particular neighborhood or area. * Maximize Selling Power: In addition to maximizing your buying power on the real estate market, a tenant in common co-ownership can also increase your selling power. This is because when you divide a property, you will likely be able get more money selling the individual portions to different buyers, as opposed to selling the entire property to a single buyer. * Low Risk: In a traditional joint-tenancy arrangement, both co-owners must contribute to a single mortgage covering the entire property (if taking one out is necessary). This means if one co-owner bails on the agreement, or dies the other co-owner becomes solely responsible for the property’s mortgage. With a tenants in common agreement, co-owners can take out separate, smaller loans to cover individual sections of property. This means you will never be stuck with more debt than you could anticipate. In addition, tenants in common allows you to more easily get out of a partnership if you no longer wish to co-own a property, as you can sell your portion of the rights whenever you want.
Disadvantages of Tenants in Common * Inheritance Issues: In a traditional joint-ownership agreement, when one co-owner dies, the surviving owner takes over the entire property. As mentioned above, a tenants-in-common agreement makes it possible for you to bypass this scenario, and let family or friends inherit your shares. However, according to Arctic.org, this process is not always as smooth as it sounds. For example, inheritors must first pay Probate court costs in order to verify the will of the deceased before they can claim ownership of their shares. In addition, there could be unpleasantness between the surviving co-owner and the new co-owner if they disagree on how to care for the property and other issues. * Forcing Sales: While a tenant in common is suppose to provide co-owners with flexibility and independence, meaning that each owner can sell his portion of the property whenever he wants, and can remain an owner of that portion for as long as he wants; this is not always the case. If one co-owner wants to sell the entire property, he can file a partition lawsuit. If the lawsuit passes, the court will order that the house be sold, and the other co-owner, even if unwilling will have to forfeit ownership and receive a portion of the sale proceeds. * Resale: Part of the reason why one co-owner in a tenants-in-common agreement may want to sell an entire property, instead of just the portion he owns, is because of poor resale value. * IRS/TAX Concerns: According to Sirkin and Associates, limited liability companies (LLCs) are co-ownership agreements that provide a high degree of liability and management protection, meaning each co-owner has minimal financial responsibility if something goes wrong. However, depending on the state, LLCs can face increased taxation, which is why some people turn to tenants-in-common agreements to avoid that. The problem with this strategy is that the IRS may still treat your tenants-in-common agreement as an LLC or other type of legal partnership and tax you accordingly, especially if you and a spouse or another family member are the co-owners.
How can Tenants in Common be terminated?
A tenancy in common may be terminated in three ways: * By an agreement between all of the tenants in common; * By a judge, ordering partition (either a physical division of the land or a partition by sale); and * By ouster - which means any act that unlawfully deprives a tenant in common of their share of the property.
Tenancy by Entirety
Tenancy by entirety is where married couples can hold the title to a property. In order for one spouse to modify his or her interest in the property in any way, the consent of both spouses is required by tenants by entirety. It also provides that when one spouse passes away, the surviving spouse gains full ownership of the property. A married couple may choose to create a joint tenancy or a tenancy in common. A married couple is presumed to take title to property as tenants by the entirety, unless the deed or conveyancing document states otherwise.
This form of co-ownership has been in existence for several years now. However, many attorneys were reluctant to utilize this method of holding title until the case law clarifies the advantages and disadvantages.
Advantages of Tenancy by Entirety * Each rights: to enjoy and possess the property, that is jointly owned by them a tenancy in entirety. Only real property comes under the ambit of this provision, but, in some cases, even personal property is found to be included. * Right of survivorship: Tenancy by entirety have right of survivorship on each spouse. This means, on the death of one spouse, the other is entitled to the entire interest in the whole property. * Shield against creditors: One of the greatest advantages of tenancy by entirety is that this type of concurrent estate can be a protective shield against creditors of any one spouse. In other words, the creditors cannot touch a jointly held property as a tenancy by entirety. * Conveyance of Mortgage: Protects against one spouse conveying or mortgaging the couple’s property without the consent of the other. * Legal Issues: Couples own property by entirety, which means a successful lawsuit against one spouse, will not put a lien on the house. Tenancy by entirety provides homestead protection in the event of a judgment against either spouse. Through this form of co-ownership there are no probate delays in the event of death of one spouse; the right of survivorship makes the surviving spouse the immediate sole owner. The surviving spouse becomes sole owner in severalty. The term severalty indicates that the sole owner is severed, or cut off, from other owners. * Forced sale protection: It provides some protection against forced sale of jointly held property to satisfy a debt judgment against one of the spouse.
Disadvantages of Tenancy by Entirety * No Protection: It provides for no one except the surviving spouse * Tax Problems: It may create estate tax problems * Will: It does not replace the need for a will to direct how couples personal property shall be disposed.
How Tenancy by Entirety can be terminated * Court Termination: A tenancy by entirety can be terminated through a court-ordered sale to satisfy a claim against both spouses as joint debtors. This form of ownership is also terminated through divorce as there is no longer a marriage unit for the property to belong to. * Other Termination: Through agreement of both parties, the tenancy by entirety may also be terminated. To complete this, a new deed must be conveyed that indicates the new form of ownership for the property. However, the parties cannot unilaterally make any decision to sell or divide the property or to end the tenancy or to dispose of the property by will.
Comparative Analysis
The most important difference between a tenancy by entirety and a joint tenancy or tenancy in common is that a tenant by entirety may not sell or give away his interest in the property without the consent of the other tenant. Upon the death of one of the spouses, the deceased spouse 's interest in the property entrust to the surviving spouse, and not to other heirs of the deceased spouse. This is called the right of survivorship.
There are several rights which are enjoyed by the co-owners. All owners have equal rights to possess the property; each owner has the right to sell his interest in the property.
Joint tenancy is based primarily on survivorship, which means that upon the death (intestate) of one of the joint tenant, the surviving tenant(s) will possess the entire estate. The incidence of survivorship would seem to be very unfair when one considers the entitlements of the heirs of the deceased joint tenant. This created numerous feuds in both the English and American courts. As stated earlier, as long as the four unities were present at the time of death, joint tenancy would be held by the surviving tenants. Providing that any one of the unities were absent at the time of death, a tenancy in common would be created. However, according to English law, joint tenancy can be converted into a tenancy in common through very simple means.
Conversely, joint tenancy can assist with avoiding Probate. Providing that an individual dies, his or her will is reviewed by a Probate court. The court will determine the validity and legality of the will and the assets and liabilities the deceased had. After all outstanding debts have been settled, the remaining assets will be distributed to the surviving heir(s). This can be a tedious process, taking months or even years especially when handling complicated estates. While, joint tenancy with survivorship, avoids probate; it automatically transfers ownership to the surviving spouse or business partner upon the death of the first partner. As one can imagine, this is an enormous advantage for those who need the funds immediately especially for funeral expenses. The Probate court has the right to freeze the account of the deceased to avoid it being liquidated by spouse or business partner. Normally, this action of the court would out of a dispute over whether the surviving spouse or business partner actually contributed to the account.
According to the UK Land Registry, a simple notice of severance from the joint tenancy would make any person relieved from the joint tenancy. A severance by notice is the most cost benefit analysis. This severance would be an agreement by the co-owners. One co-owner would give notice to the other(s) of his intention to do so. It stated that the party, who seeks to sever, would give up his right to joint tenancy and forego the right of survivorship. Another way of severing a joint tenancy is the right of one co-owner to transfer or mortgage his interest in the property to a third party. There is a Supreme Court decision - Gamble v Hankle - which demonstrates that a transfer from one joint tenant to a third party without the consent of the other joint holder is likely to be upheld and is adequate to sever a joint tenancy.
There are some instances in which the court may find that one joint tenant has lost his interest in the property and loses his right to acquire the entire property upon the death of the co-tenant. This was highlighted in the case of Wills v Wills (2004), a decision of the Privy Council in an appeal from the Jamaican Court of Appeal. The Privy Council ruled “that because of Elma’s total exclusion from the properties and as a result, George used those properties as if he was the sole owner except for sharing his occupation and enjoyment with his wife, Myra; Elma had discontinued her possession or had been dispossessed for a period exceeding the legally ample time of twelve years; which George was held to have acquired sole possession by adverse possession. If she had wished to maintain her interest in the properties, she could have sought to have the properties sold or rearranged their ownership by an exchange of beneficial interests or even obtain a proper written acknowledgement of title”.
Unlike joint tenant, the interest of tenancy in common does not terminate upon the death of a party. Tenancy in common often has unequal interests and/or unequal rights in the property, often owing to the amount contributed to the purchase price. This is common between husband and wife, parent(s) and child, or other persons. With tenancy in common, each owner owns a percentage or a fraction of the asset acquired. The interest might be unequal such that one co-owner could have as much as three-quarters interest in the property. Having the greater stake in the property does not mean that one has the right to exclude others who own smaller shares from occupying the property. In addition, each owner has the right to receive a prorated share of the rents profits that accrued from leasing or selling the property respectively held in tenancy in common.
Also, each party has the legal right to sell his or her portion of the asset without approval or consent from the other parties involved. This form of co-ownership gives the owner more freedom.
The tenant in common can transfer his share or upon death the share will be passed onto his heirs, as unity of title is not required. This is similar to the Dayabhaga coparcenery theory (Hindu). Coparcenery is a narrower body of persons within a joint family and consists of father, sons, sons’ of sons and sons, son’s son. A coparcener has an interest by birth in the joint family property; every coparcener has the right to be in the possession and enjoyment of the joint family property; and every coparcener has the right to be maintained including a right of marriage expenses being defrayed out of joint family funds. As indicated in the facts of the case Wills v Wills (2004), George offered her $25,000 for her share in the properties. She said she did not accept the offer because it was too low and she had hoped to own the properties as the survivor, so she wanted him to enjoy the rent from the properties and she did not want to deprive him of a roof over his head.
In the case of Sawada v. Endo – Case Brief in the Court of Appeals New York, Dated: 1977. The Parties: Sawada- Plaintiff, Appellant, Injured party and Sam and Toru Endo- Defendant, Appellee, Conveyed land by father, Kokichi Endo- Father, Ume Endo- Mother; Cause of Action and Remedy: The following is a civil action seeking to set aside a conveyance of real property from judgment debtor husband Endo to his sons. “Any real property held in tenancy by the entirety shall not be liable to be sold upon judgment against only one of the tenants, except if the property was transferred into tenancy by the entirety with the sole intent to avoid the payment of debts existing at the time of the transfer beyond the transferor 's ability to pay those debts as they become due”.
Where the judgment held that: “a tenancy by the entireties is subject to levy and execution by creditors when there is are outstanding Judgments for personal injury and the property was conveyed because under the Married Women 's Property Acts, the interest of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouses. Furthermore, the conveyance of the marital property was not in fraud of the judgment creditors”.
Recommendations
Law makers should revisit the way in which concurrent ownership is executed, whether more autonomy should be given to some aspect of concurrent ownership and whether other sections may be reduced by removing some of the power given.
There are aspects of the concurrent ownership which seem to need some amount of revamping in how assets are transferred and the requirement for intestate during a probate of a will. Also, the regard for creating mutual, equitable and just agreement during the loss or transfer of property.
In the case of a joint tenancy, since all tenants acquired the property at the same time, all tenants have an equal interest in the property; all tenants acquired title by the same deed or will; and all tenants have an equal right to possession. It is only reasonable that in the event of sale all tenants should agree to sell. It should not be that you can convey your joint tenancy interest to any third person without the knowledge of the co-tenant (s) as in the case of Gamble v Hankle. If a party of a joint tenancy wants to transfer his stake in the joint ownership then all party should either agree or through court of law apply for such privilege. This undermines the true purpose of joint tenancy. The facts of the case Gamble v Hankle are of particular interest. The property in question was owned by husband and wife as joint tenants. The husband died in 1981 and the wife claimed ownership of the entire property in accordance with the principle of survivorship. She then tried to evict Hankle from the property. (McGregor, 2009).
A copy of a deed of gift dated November 21, 1980, was tendered into evidence showing that the husband had purported to transfer his interest in the property to Hankle. The wife argued that the deed was ineffective to transfer the husband 's interest in the property to Hankle (McGregor, 2009).
This in fact, defeats the purpose of the joint tenancy by allowing one co-owner to transfer without the knowledge of the other. If one can purport to transfer ones joint ownership then it makes sense choosing a tenancy in common. There is, therefore, no real security enjoyed by a joint tenant that the entire property will belong to him or her after the co-owner dies, because each co-owner has a right to take such action as will be effective to sever the joint tenancy during his or her lifetime.
Reasonable steps should be taken to inform property owners of their responsibilities and rights regarding to concurrent ownership. Such responsibilities should speak to payment of taxes, because government makes no little pronouncement about it, but more so, to ensure that one plays the necessary role to secure one’s property from any encroachment and adverse possession. Whenever there is any separation in relationship the necessary steps are taken by the person(s) in possession of property to advertise their intent of taking the property through adverse possession, if other co-tenant(s) fails to show interest in same property.
As mentioned in the case of Wills v Wills (2004) the plaintiff was not involved in the collection of rent neither did she communicate any instruction as it relates to the rent collection or the property in question. But ignored all transaction including property the trial judge used these evidence to grant the defendant adverse possession of the property.
Tenants in common is recommended for small and medium size businesses, as it is the best way to pool resources together without fear of losing one’s personal share in a property. This way, if one tenant defaults on his or her loan the other tenant(s) have their own titles for their share of the property and will be responsible for their own debt.
Conclusion
Concurrent ownership is substantially more than just owning a property with others, it is more than just finding a partner to co-tenant and ease the burden of having to purchase a property all by oneself. It entails carefully analyzing the pro and cons, looking meticulously into the concurrent ownership features, advantages and disadvantages. The fact that the same parcel of land can be owned by several individuals concurrently may force a co-owner into a precarious position.
Though it is the solution of choice for many first time home owners, it has also severed and left many first time home owners in distress; mainly because they did not carefully analyzed each aspect of concurrent ownership. This is why it is essential to understand the various forms of concurrent ownership as applicable to one’s situation.
Joint tenancy has been the choice for many married home owners in Jamaica and has the benefit of the right of survivorship, therefore in the event of death, the surviving party gain fee simple ownership of the property and is free of all encumbrances as stipulated by law. This is important in protecting the surviving spouse from any impediment. Of note, are the unities which describe a joint tenancy, with removing one or more of the unities as joint tenancy and tenancy in common. There are certain benefits which are derived through taxes when choosing a joint tenancy. At the death of one joint tenant there is no need for probate as the property passes on the surviving tenants. However, one must be cognizant of one’s responsibility under joint tenancy.
Tenancy in common, is the more sought after by singles, business partners, common law relationships and children of property owners. This gives co-owners more freedom of choice to decide what is to be done with their share of property and how to dispose of property without the knowledge or intervention of other tenants in common. As the name suggest, they all share “common” in the property, they have unison of possession, no matter the percentage share. Nevertheless, a co-tenant can get a force order for the property to be sold.
Tenancy in entirety is somehow similar to joint tenancy but yet differ in some aspect of it. Tenancy in entirety is binding to what is stated in the deed and one party cannot make a decision to the property without the consent of the other. This concurrent ownership is mainly used by married couples, it protects co-owners from creditors taking lien on the property if there was a breech by one co-tenant, without the consent of the other.
Importantly, all the concurrent ownerships; joint tenancy, tenancy in common and tenancy by entirety have their advantages and disadvantages, their benefits and losses their features and requirements. The questions one may ask: are you prepared to tolerate a co-owner who has undivided rights in your property? Are you prepared to live with someone who will put a lien on your property without consulting you? Or are you permitted to transfer your property to the heir of your choice? Or should you purchase a property that was willed to people you have little in common with? It is clear that potential concurrent owners are required to answer these questions before they make the decision to purchase.
APPENDIX
COMPARISON TABLE
Joint Tenancy | Tenants in Common | Tenancy by Entirety | Right of survivorship | No right of survivorship | Right of survivorship | Unities of time, title interest and possession | Separate titles | Unities of time, title, interest, possession and marriage | Two (2) or more persons are eligible | Two (2) or more persons are eligible | Applicable exclusively married persons | Undivided interest | Undivided interest | Undivided interest | Equal responsibilities: all tenants are equally responsible for the liabilities of the property (taxes) | Prospective co-owners are faced with various uncertainties | Protected by against foreclosure |
REFERENCES
Information used and cited in this research paper was taken from the following credible sources:
* Gayle, B (December 7, 2003). Understanding the Limitations of Actions Act. The Jamaica Gleaner. Retrieved from http://jamaica-gleaner.com/gleaner/20031207/focus/focus2.html * Glen, C (June 7, 2012). The Benefits and Pitfalls of Joint Tenancy. Investopedia. Retrieved from http://www.investopedia.com/articles/pf/08/joint-tenancy.asp. * Jacobus C. J (2010). Real Estate Principles 11th Edition. 5190 Natorp Boulevard, Mason, OH 45040 USA. * Laws.com - Background on Concurrent Ownerships. Retrieved from http://real-estate.laws.com/concurrent-ownership. * Laws.com -Real Estate. Retrieved from http://real-estate.laws.com/concurrent-ownership/ownership-definition. * Legal Dictionary (2013). Duhaime.org. Retrieved from http://www.duhaime.org/LegalDictionary/C/CuiusEstSolumEjusestUsqueAdCoelumetadInferos.aspx * Macaulay, M (February 23, 2004). The Property (Rights of Spouse Act) 2004. The Jamaica Observer. Retrieved from http://www.jamaicaobserver.com/magazines/allwoman/56103_The-Property--Rights-of-Spouses--Act-2004 * McGregor, S (June 8, 2009). Laws of Eve – Avoiding the incidence of Joint Tenancy. The Jamaica Gleaner. Retrieved from http://jamaica- gleaner.com/gleaner/20090608/flair/flair9.html * Nicholson, A. (Q.C.) ( ). The Family Property (Rights of Spouses) Act, 2003. The Jamaica Information Service. Retrieved from http://www.jis.gov.jm/special_sections/Bills%20&%20Acts/pdf/TheFamilyPropertyAct.pdf * Prof (Dr.) Kumar, V. Hindu Law of Coparcenary and its Composition (PowerPoint Slide). Scribd.com. Retrieved from http://www.scribd.com/doc/33115992/2-Hindu-Law-of-Coparcenary-and-Its-Composition * The Privy Council (December 1, 2003). Retrieved from http://www.ipsofactoj.com/international/2004/Part07/int2004(7)-003.htm. * Yuheda, A. Law Journal (PDF). The Maxim “CUISUS EST SOLUM EIUS USQUE AD COELUM” is a presumption rebuttable by circumstance. Retrieved from http://lawjournal.mcgill.ca/documents/8/4/abramovitch.pdf
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[ 1 ]. Scribd.com
[ 2 ]. http://www.ipsofactoj.com. Privy Council 1 December 2003
References: Information used and cited in this research paper was taken from the following credible sources: * Gayle, B (December 7, 2003) * Glen, C (June 7, 2012). The Benefits and Pitfalls of Joint Tenancy. Investopedia. Retrieved from http://www.investopedia.com/articles/pf/08/joint-tenancy.asp. * Jacobus C * Legal Dictionary (2013). Duhaime.org. Retrieved from http://www.duhaime.org/LegalDictionary/C/CuiusEstSolumEjusestUsqueAdCoelumetadInferos.aspx * Macaulay, M (February 23, 2004) * McGregor, S (June 8, 2009). Laws of Eve – Avoiding the incidence of Joint Tenancy. The Jamaica Gleaner. Retrieved from http://jamaica- gleaner.com/gleaner/20090608/flair/flair9.html * Nicholson, A * Prof (Dr.) Kumar, V. Hindu Law of Coparcenary and its Composition (PowerPoint Slide). Scribd.com. Retrieved from http://www.scribd.com/doc/33115992/2-Hindu-Law-of-Coparcenary-and-Its-Composition * The Privy Council (December 1, 2003)
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