Taking title to real estate: joint tenancy and tenancy in common
“Title” is evidence of ownership. As pertains to real estate, title relates to the ownership of land and/or the more-or-less “permanent” improvements, such as a home or other building, upon it. Title is the right to ownership of that particular parcel of land and the permanent improvements upon it in derogation of all other claims.Generally speaking , when the land is owned by two or more persons, there are two major ways that title to land and the improvements upon the land may be held . The land may be held in joint tenancy (in which case the owners are referred to as joint tenants) or the land may be held as a tenancy in common (in which case the owners are called tenants in common).It should be noted at the outset that although the term “tenant” is employed in both of these motifs of ownership, “tenancy” in this instance does not refer to parties who are renting or making temporary use of the property. Technically, a “tenancy” simply involves an interest in realty and, in the broadest sense, a “tenant” is one who holds or possess land by any right or title. In common usage, a tenancy and/or a tenant has come to refer to one who has temporary use and occupation of real property owned by another person (the landlord). However, despite this common usage, the terms “tenancy” and “tenant” persist in their technical, legal meaning in referring to the guise of ownership.Joint tenants are two or more persons who own real estate together. They own the property by joint title created by one and the same deed or will. Joint tenants have one and the same interest in the property and are said to have “undivided” possession of the property. More simply stated, joint tenants each own an interest in all of the same thing, that is to say the property.Tenants in common are also two or more persons who own real estate together. Tenants in common, however, hold the land together by several and distinct titles. Tenants in common each own a divisible part of the whole thing, that is to say they each own a severable interest in the property.The distinction between joint tenants and tenants in common is profound. A joint tenant, since he or she holds title jointly with his or her co-joint tenant, cannot sell or otherwise transfer the property without the consent and cooperation of his or her co-joint tenant. He or she cannot “divide” the property and transfer his or her interest. Each of them owns an indivisible part of the whole thing. A tenant in common can, however, divide his or her interest and sell or otherwise transfer that interest to another person or entity without the consent or cooperation of his or her co-tenant in common.One of the practical problems with a tenancy in common, however, is, despite, the fact the co-owner’s interest is legally divisible and therefore potentially transferable to another, usually the fair market value of the interest is diminished to the potential buyer owing to the simple fact that he or she will “be in bed” with the remaining co-tenant in common. In other words, the salability of the interest may be reduced by the fact that the buyer must be in partnership with the remaining tenant in common, someone that he or she may or may not know and with whom he or she may or may not be suspicious about being in business. Say three brothers own realty as tenants in common and one decides to sell his interest. Although he may do so, the potential buyer will now be in business with the remaining two bothers and will inherit all of the family dynamic that be attendant with such interest. Accordingly, the potential buyer may be hesitant about the purchase and his or her hesitancy may well be reflected in the price that he or she may be willing to pay for the interest.It is often said that title is held “as joint tenants with a right of survivorship.” For this reason, joint tenancy is the most common way that a husband and wife take title to real property. Since each owns an indivisible interest in the whole thing, when one predeceases the other, the survivor automatically inherits the deceased partner’s interest without the need to probate the deceased spouse’s interest. Further, the deceased spouse’s interest in the realty cannot be conveyed without the survivor’s participation and consent. Accordingly, the deceased spouse may not convey his or her interest in the realty to someone other than the surviving spouse by the instrument of his or her will or other testamentary devise. In this sense, it is “safer” for a husband and wife to own real property as joint tenants.Although a joint tenancy is the safer way for a husband and wife to own real property, it is not unusual for a husband and wife to own property as tenants in common or even for one or the other spouse to own property, even the marital residence, in his or her sole name thus exposing the other spouse to much greater potential exposure.While on the surface the way that property is owned may seem inconsequential, in point of fact, the guise of ownership can and often does have profound legal consequences, often beyond the wildest imaginings of the parties co-owning the real property.Rohn K. Robbins is an attorney licensed before the Bars of Colorado andCalifornia who practices in the Vail Valley. He is a member of theColorado State Bar Association Legal Ethics Committee and is a formeradjunct professor of law. Robbins lectures for Continuing Legal Educationfor attorneys in the areas of real estate, business law and legal ethics.He can be heard on Wednesdays at 7 p.m. on KZYR radio (97.7 FM) as host of”Community Focus.” Mr. Robbins can be reached at 926-4461 or at email@example.com.Vail, Colorado
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A Nov. 30 to Governor Polis and the Eagle County Commissioners from Beaver Creek Resorts Company – as well as the towns of Vail, Avon, Eagle and Minturn – requests a variance program which would allow businesses to remain open.