July 25, 2011

Tenancy in Common & Joint Tenancy


Tenancy in Common 

Tenants in common share equal property rights except that, upon the death of a tenant in common, that share does not go to the surviving tenants but is transferred to the estate of the deceased tenant meaning that there is no right of survivorship. It is passed to their legal heirs. Tenants in common of an item property may own equal or unequal shares, sometimes expressed in percentages. Each tenant in common may sell his share to another.

“Each tenant in common has a distinct share in property which has not yet been divided among co-tenants. Thus tenants in common have quite separate interests. The only fact which brings them into co-ownership is that they both have shares in a single property which has not yet been divided among them. While the tenancy in common lasts, no one can say which of them owns any particular parcel of land.

The size of each (co-tenant's) share is fixed once and for all and is not affected by the death of one of his companions. When a tenant in common dies, his interest passes under his will or intestacy, for his undivided share is his to dispose of as he wishes.”[1]

For instance X and Y acquire real estate as equal tenants in common, each having furnished one half of the purchase price. Upon B’s prior death, his one half interest in the property passes to his estate or heirs.

Another feature of tenancy in common is that all owners are allowed to use the whole of the property in common with all tenants in common since they hold the property together by several and distinct titles, but by unity of possession.


Joint Tenancy

In joint tenancy, two or more persons are equally owners of some property. The share of a joint tenant who dies goes to the surviving joint tenants until there is but a single survivor, at which time the sole survivor owns the whole unlike tenants in common where when such a property owner dies, his share goes to his estate. This is the unique aspect of joint tenancy that as the joint tenancy owners die, their shares accrue to the surviving owner(s) so that, eventually, the entire share is held by one person.

A valid joint tenancy is said to require the "four unities":
a)      unity of interest (each joint tenant must have an equal interest including equality of duration and extent);
b)     unity of title (the interests must arise from the same document),
c)      unity of possession (each joint tenant must have an equal right to occupy the entire property); and
d)     unity of time: the interests of the joint tenants must arise at the same time;

Indian Courts strongly leans against holding any particular ownership as joint tenancy. The presumption is always in favour of a tenancy-in-common[2].

Since in case of death of each joint tenant, his (or her) interest goes to the remaining joint tenant and by the passing deaths of all but one joint tenant, the title is finally unified with the last survivor by the “right of survivorship”. This characteristic prevents an interest held in joint tenancy from being conveyed by will.

For instance if A, B and C acquire real estate as joint tenants, each one is entitled equally to the rights accruing out of the property. Upon B’s prior death, his one third interest in the property instead of passing to his estate or heirs as is the case in tenancy-in-common will pass on to A and C and subsequently upon C’s prior death, his one half interest in the property will pass on to A by his right of survivorship. 

[1] Megarry, R., The Law of Real Property (London: Sweet & Maxwell, 2000, 6th Edition), page 481.
[2] Venkatakrishna v. Satyavati; AIR 1968 SC 751

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