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Most people have encountered the terms tenancy in common and joint tenancy during sometime in their life. These terms are everyday jargon for people in the estate planning industry. It’s something that people need to be aware of because purchasing a property is something anyone who has the resources can do.

Before tackling their differences it’s important to discuss first what they are and second how are they similar.

Tenancy in Common and Joint Tenancy Similarities

  1. They are terms used to define ownership of fixed assets like houses or buildings – these words are present when discussions about purchasing a piece or property like a land or a house is brought up.
  2. They are about multiple ownership – they are words used when referring to a property owned by more than one person. They cannot be used for land or property owned solely by an individual. Like for example the three owners of an HDB flat.
  3. They are viewed as a holistic ownership – Weili, Marcus, and Rick buy a house together, each of them are owners of the house regardless of how much each person has contributed to the purchase. They have the right to use the home as a whole, and they can enjoy using all the home’s facilities.

Tenancy in Common and Joint Tenancy Differences

  1. Tenancy in common and joint tenancy differ in share – though they both have holistic ownership in the legal context, they differ in shares distribution. Tenants in common have different percentages of ownership (90% – 10%, 40% – 60%) while joint tenants have an equal amount of share (50%-50%).
  2. How the property is passed on – this is where they differ greatly, in joint tenancy there is a rule called the right of survivorship. This means that the, when one of the people listed in the property owner information dies then his whole share, will go to the surviving owner. This is different from tenancy in common where the shares of the deceased will go to his or her heirs via a Will.
  3. Right to Enjoy as a whole – earlier we have stated the holistic ownership of a property, in the case of tenants in common, this can be altered. This can be demonstrated by the example below
    1. Cheng & Dina buy a property as tenants in common, Dina cannot use the land during spring because Cheng will be using it as a venue for wedding parties.

In-depth Look At The Two

a table showing the differences of the two types of concurrent estate taken from "The Rockwills Guide to Succession and Trusts in Wealth Management"

Table 2.62 showing the differences between the two types of concurrent estate taken from “The Rockwills Guide to Succession and Trusts in Wealth Management.”

Tenancy in common

  • Two or more persons buy a property together forming a concurrent estate (similar to joint tenancy).
  • It is the common or default type of tenancy.
  • It can have varying amounts of property proportion shares depending on the agreement of the owners. The shares can be equal or unequal unlike the 50/50 split of joint tenancy
  • These shares can be transferred to anyone for any reasons.
  • When one of the co-tenant dies, his or her shares goes to the heirs who are stated in his or her Will.
  • All owners have the right to use and enjoy the benefits of the property. This right can be altered according to the agreements of owners.
  • Owners can end the tenancy in common by petitioning the court to divide the property among co-tenants. This is division of the property is called partition. There are two kinds of partition: partition in kind and partition by sale
    • Partition by kind will divide the real estate physically, so it if its a lot then the court will divide that lot according to the co-tenants share.
    • Partition by sale means that the court will sell the property and divide the proceeds among the co-tenants.

Joint Tenancy

  • Two or more persons decide to buy a property together forming a concurrent state
  • They have an equal amount of shares example – 50%-50%, and it cannot be altered.
  • When one of the co-owners/co-tenant die his or her share immediately passes to the other co-tenant. This is called Right of survivorship, and it’s outside a Will’s legislation. The right of survivorship is superior to a Will; this is because a joint tenancy falls under non-probate assets and Wills only govern probate assets.
  • Like all concurrent estates, each owner has the right to use and enjoy the property
  • It is governed by The Four Unities: these are Time, Title, Interest and Possession.
    • Possession – requires that all co-tenants should be able to use the property as a whole. This right cannot be altered unlike other concurrent states
    • Time – requires that both owners acquire the property at the same time.
    • Title –  requires that both owners have the same title to the property
    • Interest – requires that both parties have the same interest in the property
  • A joint tenancy ends when there is “Severance“. A severance occurs when one of the four unities are interrupted.
  • Other ways severance can happen
    • Partition – similar to tenants in common, a partition can also occur in a joint tenancy.
    • Transfer – when one of the co-tenants sell his or her share of the property
    • Mortgage – when one of the co-tenants uses his share for a mortgage in the bank
  • When a joint tenancy is severed it becomes a tenancy in common.

Tenancy in common and joint tenancy each have their advantages and disadvantages. So before anyone should plan on buying a property with another person, he or she should consider the holding structure carefully. If a person intends to maintain control of a property during their lifetime, it is recommended to use a Will or Trust to distribute the asset upon death, rather than setting up a Joint Tenancy.