1. Types of legal joint ownership
Tenancy in Common: In this form of
ownership, the owners can hold equal or unequal shares in the property. Each party owns
an undivided share of the property. For example, there could be five people in the
agreement, with four owning 1/10 of the property and the fifth owning 6/10 of the property.
A person can sell his interest in the property. Tenancy in common does not carry an
automatic right to survivorship as in joint tenancy. The ownership share is distributed
as a will dictates.
2. How to choose between them?
In general, a Joint Tenancy is more suitable when a spousal relatioship
exists between the partners. However, there are various reasons why some people
prefer tenancy in common to joint tenancy:
* If you are purchasing the property for investment with non-relatives,
you may not want them to automatically inherit the property upon your death. You may
wish to have control over who inherits the property when you die. The only way this
can be dealt with is in a tenancy in common situation.
* If you are putting unequal amounts of money into the property,
a tenancy in common structure would reflect those contributions in terms of the
percentage interest in the property. This would not be the case in a jont tenancy.
* Tenancy in common might also be preferable if one of the owners of the
property wishes to have the freedom to raise money for other purposes, such as a business.
In many cases the tenancy in common portion can be mortgaged without the consent of the
other parties.
If you have any doubt on what type of legal joint ownership is best suited to your
circumstances, you should consult your lawyer.
Joint Tenancy: This is a situation
in which an owner has an undivided but equal share with the other owner or owners, who are
listed on the title of the property. One of the main feature is the right of ownership.
This means that if one of the joint owners dies, the others automatically receive the
deceased person's share, equally divided, whehter or not a will exists.