DISCLAIMER: This information is based on Georgia Law. Its purpose is to educate the public on the basic characteristics of a joint tenancy, and is not intended to render any legal counsel on its use. The author is by no means a licensed attorney, and strongly advises that readers consult with an attorney with knowledge of their state laws, and of any relevant legal information pertaining to this type of concurrent ownership.
Joint tenancy is a form of ownership that is held concurrently (at the same time) by two or more individuals. In Georgia, the law recognizes only two types of concurrent ownership. The first is called tenancy in common where two or more individuals share ownership of a single property, and are allowed to possess an unequal but undivided portion of the property. The second is called a joint tenancy where the ownership interests are equal and undivided by the owners. The major difference between the two is that while tenancy in common permits a deceased co-owner to pass his or her ownership interests to surviving heirs, joint tenancy does not permit right of survivorship to the deceased’s heirs. This exposé will focus solely on joint tenancy ownership, and will explain the four basic characteristics that are needed to create it.
Characteristic of Possession
This means that the joint tenants are required by law to possess an undivided and equal portion of the entire property. None of the owners are entitled to claim more than the other owners regardless, of the size of their individually invested interest. For example, if there are three owners and each of them invests 50%, 30%, and 20% respectively, they must all acquire and own an equal share of the property; meaning that each will own one-third. In addition, all three must have possession of the entire property. No co-owner can pick out a certain part of the property and claim it as his or hers exclusively. They all must possess the entire property equally under the law.
Characteristic of Interest
The joint tenants own the single property together, and the property will be used by each owner for its intended purpose. If the property ownership is for a business operation, then each owner must use it for that specific purpose. On the other hand, if the property’s intended use is to provide residency for the owners, then each of them must use it specifically for that purpose. The unity of interest also refers to title rights. For example, if one co-owner holds a fee simple interest in the property, the others must also hold a fee simple interest.
Characteristic of Time
The characteristic of time means that each joint tenant must acquire an ownership interest in the same property at the exact same time. Once the ownership is formed, no one else can join in and acquire ownership at a later date unless an entirely new joint tenancy ownership agreement is formed among the existing co-owners, and the new co-owner at the same time. If one of the owners sells his or her interest to a new co-owner, a new joint tenancy agreement must be formed to include both the two remaining co-owners and the new co-owner. If the co-owners fail to form a new joint tenancy agreement, the new co-owner will not hold a joint tenancy ownership, but will automatically hold a tenancy in common ownership. This means that the two remaining co-owners will hold an undivided two-thirds joint tenancy interest in the property, and the new owner will hold an undivided one-third tenancy in common interest. As the law requires, the joint tenancy owners will not be allowed to pass on survivorship interests to heirs upon death, but the new tenancy in common will be entitled to pass on survivorship interests to his or her heirs.
Characteristic of Title
Title is a legal term for the ownership in a piece of property, and the verifiable evidence regarding proof of ownership. In a joint tenancy agreement, the owners must acquire good title; which involves possession, right of possession, and right of property. Possession is the actual ownership of the property. With right of possession, the owner has legal ownership, and has sufficient proof to present in court if an outsider also claims possession. The right of property is the owner’s right to use the property where the owner can again show proof in court. Each owner must be able to prove possession, right of possession, and right of property in order for the joint tenancy to be valid. If this cannot be established, the owners will automatically lose the property, and their property interests. Also, as previously mentioned, the owners must hold similar title rights. Whether the title is a fee simple or a life estate, each owner must hold the same exact title in the property.
These are the four basic characteristics that are needed to legally create a joint tenancy. Those who are seriously considering forming a joint tenancy are urged to first contact an attorney in their local area for further details