A co-owned property is a property that was purchased and is owned jointly by two or more people. Co-ownership is not a new concept. As real estate prices keep increasing, purchasing real estate with other people can make more financial sense. In California, there are different types of co-ownerships. They are tenancy in common, joint tenancy, tenancy in partnership, and community property. In this article, we discuss these four types of co-ownerships.
This form of co-ownership is considered the default by courts. In other words, individuals who acquire real property together own the property as tenants in common unless they are a married couple, registered domestic partners, or the conveyancing instrument states otherwise. One key feature of a tenancy in common is that tenants can own equal or unequal shares of the property, but all co-owners have the right to occupy and enjoy the entire property. Secondly, in a tenancy in common, the right of survivorship does not apply. This means that when a co-owner dies, their interests in the jointly owned real estate property may be transferred to their heirs or beneficiaries through probate or another legal proceeding. Additionally, with a tenancy in common, any rent collected from third parties goes to all co-owners as per their proportionate interest in the property.
A joint tenancy is when two or more people own an equal share of the property, and just as it is with tenancy in common, in a joint tenancy, all co-owners enjoy equal rights to occupy, use, and enjoy the entire property. Joint tenancy is created by a single transfer declaring the type of ownership to be joint tenancy. Unlike the case with tenancy in common, a joint tenancy carries with it a right of survivorship. This means that if a co-owner dies, their ownership rights pass to the surviving co-owners. This can be both an advantage and a disadvantage.
Tenancy in partnership is a type of co-ownership where the property title is held in the partnership’s name. Property is also considered partnership property if one or more partners purchase it, and there is an indication in the transfer instrument that a partnership exists or the person or people making the purchase are partners. In a tenancy in partnership, individuals do not own the property. Instead, the partnership owns the property. Because of this, individual owners in a tenancy in partnership do not have any individual interest in the property.
Community property is any property acquired by married couples or registered domestic partners unless the property is expressly acquired in another form, such as “tenants in common.” With community property, spouses have equal interests in the property. Each spouse has equal rights to possess, control, and manage the property.
Co-ownership issues can arise and leave co-owners unhappy with their current arrangement. In such a case, if yours is a joint tenancy or tenancy in common, and resolving the dispute is not an option, you can forcefully end your co-ownership relationship through a partition action. With a partition action, the ownership interests are divided among all involved parties.
If you have a specific legal question on co-owning real estate in California, contact our skilled attorneys at SAC Attorneys LLP.