FAQs | Types of Co-Ownership in Real Estate | Toms River Attorney

 

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What are the different types of co-ownership in real estate?

In New Jersey, there are three basic types of co-ownership: (1) tenants in common, (2) joint tenants, and (3) tenants by the entirety. The first two types can be utilized in any real estate transaction where there are multiple purchasers. The third type, however, can be utilized only by husband and wife.

A tenancy in common exists where two or more people have an equal right to enjoy and possess a property but each has its own ownership interest. What sets a tenancy in common apart from other types of co-ownership is the fact that there is no right of survivorship. This means that in a tenancy in common, when one co-tenant dies, his property interest passes to his heirs instead of his co-tenant(s). Also, a co-tenant can sell his share of the property to a third party without the consent or notice of the other co-tenant(s). The sale of one co-tenant’s interest to a third party would result in that third party becoming a co-tenant with the remaining co-tenant(s).

A joint tenancy occurs where have an equal right to enjoy and possess a property and each has the same ownership interest. Joint tenants enjoy the rights of survivorship. This means that when one co-owner dies, his property interest passes to the remaining co-owner(s), not his heirs. Also, a co-owner can sell his share of the property to a third party without the consent or notice of the other co-tenant(s). The sale of one joint tenant’s interest to a third party would result in that third party becoming a co-tenant with the remaining co-owner(s).

A tenancy by the entirety exists where husband and wife take title to a property. This type of co-ownership is only available to married persons. If one spouse dies, then the other spouse receives complete ownership of the property. Neither spouse may convey their interest without the consent of the other spouse. If consent is received, the spouse may sell their interest to a third party, and that third party would become a tenant in common with the remaining spouse. The remaining spouse still would hold its right of survivorship.

For example, John and Jane own their house as tenants by the entirety. Jane consents to John selling his interest in the property. John sells to Irene. Irene becomes a tenant in common with Jane. If John dies, Jane receives complete ownership of the property, leaving Irene with no interest in the property. If Irene dies before John or Jane, her interest passes to her heirs.

NOTE: This page is for general information only and is not to be solely relied upon. You should contact a Toms River attorney at Costanzo & Russom Law Group for specific inquiries.

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