Whenever I am completing a transaction involving two or more purchasers, I'm always required to ask how they wish to take title. There are two options in such a situation: Tenants in Common or Joint Tenants. Most of my clients ask me what the difference is.

To this day, even a lot of my peers from law school do not understand the difference. I remember walking home from property class with a bunch of my classmates, and most of them were debating what the real difference was between the two. I think many of them are still baffled by it today, which explains why they chose careers in civil litigation (no offense to civil litigators out there).

I tell my clients that the biggest differential is whether they want the property to go to the other person if one of them dies. In about 90% of the cases, that is exactly what they want. But in 10% of the cases (e.g. when family members buy commercial property together and each person puts in different amounts), they don't want that.

By registering the property with the parties as "joint tenants", the property may pass to the other person outside of probate court, thus avoiding probate tax. "Tenants in Common" do not have this benefit. But Tenants in Common can deal with the property separately in a will, thus devising the property to someone who isn't on title.

For most people, I would recommend that they consider registering as joint tenants, but it's something you should speak with your real estate or estates lawyer about before you close any purchase of land.

        

 

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