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Residential or commercial property can be owned separately (sole ownership) or jointly (joint or common ownership). In most cases, joint owners can be either co-tenants in common or joint tenants with the right of survivorship.

You can own residential or commercial property individually (sole ownership) or jointly (joint or typical ownership). For the most part, there are two ways to hold title with others. Joint owners can be among either:

- Co-tenants in common
- Joint tenants with the right of survivorship

The main distinctions between these joint ownership types are:

- How they occur
- How they are destroyed
- How the subject residential or commercial property can be divided and offered

Keep reading to explore these differences in higher information.

What Is a Concentrated Interest?

Before talking about particular types of joint ownership, it's helpful to unload the legal significance of a concentrated interest. When two or more individuals own realty, each specific owns a share (interest) of the whole residential or commercial property.

Each owner's interest is stated to be undistracted. Each owner has a right to utilize the entire physical residential or commercial property although their abstract right to the residential or commercial property is portioned out among them.

To illustrate briefly, envision that two service partners own genuine residential or commercial property together. A storage facility, possibly. The warehouse is physically concentrated, but the owners share the entire physical residential or commercial property as a whole. However, each partner may have a 50% interest, or one might have a 30% interest, and another has a 70% interest.

Each type of joint residential or commercial property ownership has particular constraints on how to divide the residential or commercial property interest.

A tenancy in typical may involve two or more owners. Each occupant in typical may own an equal share of the residential or commercial property, but there's no requirement for equal ownership. Four owners might each own a 25% interest, or their interests may break down as 10%, 20%, 30%, and 40%. Each co-tenant has an equivalent right to possess, utilize, and enjoy the residential or commercial property. The co-tenants are complimentary to make alternative plans among themselves.

Each co-tenant may also freely sell their interest. Similarly, when a co-owner of the residential or commercial property dies, their share stays part of the decedent's estate. Thus, the decedent's personal representative can transfer the decedent's share as explained in their will. Whoever gets the interest enter the previous co-tenant's shoes.

Further, the transfer of a co-tenant's interest may take place at any time. The owner change does not disturb the other co-tenant's ownership status. Jointly owned residential or commercial property is presumed to be held in an occupancy in common unless the residential or commercial property deed specifies otherwise.

A joint tenancy with right of survivorship (JTWROS), like a tenancy in typical, is a form of co-ownership. It might include 2 or more owners. However, a JTWROS should adhere to a number of restrictions.

The Four Unities

A JTWROS must satisfy the so-called Four Unities. They are as follows:

Unity of Time: Each joint occupant needs to take title of their share at the precise time.
Unity of Title: Each joint occupant should take ownership of their share through the same instrument (e.g., a residential or commercial property deed). The legal document needs to particularly mention that it is producing a JTWROS. Otherwise, the document develops an occupancy in common by default. The particular development language varies by state.
Unity of Interest: Each joint occupant needs to have an equivalent interest. Two owners must each have a 50% interest. Four need to each have a 25% interest, and so on.
Unity of Possession: Each joint tenant needs to have a legal right to possess, use, and take pleasure in the residential or commercial property equally. Unlike co-tenants in an occupancy in common, joint tenants can not alter this plan.

Violation of any of the Four Unities destroys the joint tenancy. The joint tenancy would become an occupancy in common. In specific, note that the Unity of Time and Unity of Title operate so the joint occupants can not move their share without damaging the joint tenancy. Their ownership rights can not be sold, acquired, or otherwise transferred.

Right of Survivorship

If one of 2 owners of residential or commercial property kept in a JTWROS passes away, ownership immediately moves to the making it through owner. This is called a right of survivorship. The deceased owner's estate does not get any share of the residential or commercial property. Unlike a tenancy in typical, a JTWROS co-owner can not move their interest in the residential or commercial property without destroying the JTWROS.

Does Either Avoid Probate?

Probate has two significances. It refers to the legal process of checking whether a departed person's last will and testament is valid and genuine. This happens in court of probate. Probate also describes the basic procedure of distributing a decedent's estate.

Depending on the estate's size, the probate process can be time-consuming and costly. So, does a tenancy in typical or JTWROS avoid probate?

Tenancy in Common

Typically, an occupancy in common will not avoid probate. A co-tenant's ownership interest stays part of their estate when they die. It needs to be distributed by will or according to state laws of intestate succession.

If you wish to keep the piece of residential or commercial property out of the probate procedure, you might transfer it out of a tenancy in typical and into a trust. Residential or commercial property in a trust does not come from the person who provides the residential or commercial property. Instead, the residential or commercial property belongs to the trust itself and, for that reason, is not part of the person's estate at the time of death.

Joint Tenancy with Right of Survivorship

By contrast, the ROS in a JTWROS generally guarantees that a joint renter's interest does avoid probate. When just one joint tenant stays, that private becomes the sole owner.

At the sole owner's death, their 100% share must be dispersed as part of their estate. Thus, the making it through owner does not avoid probate. Again, this can be avoided by transferring the interest into a trust.

By extension, one can think of an imaginable though improbable situation in which all joint occupants die at or near the same time (e.g., in an airplane crash), making it impossible to identify who was the last surviving joint tenant. In this case, each joint tenant's share may pour into their estates and fail to prevent probate.

Questions? A Regional Attorney Can Help

Tenancies in common have the advantage of flexibility. Joint occupancies with right of survivorship have the benefit of permanence. Understanding the advantages and drawbacks of each ownership plan before entering one can help you avoid serious headaches. A local property or estate planning attorney can provide valuable legal advice regarding joint occupancy and which type would be best for you.