Tenancy is the type of ownership someone holds in a property. The type of tenancy that exists often arise for consideration when two or more persons may be purchasing a property together or there is a transfer of interest in a property that sees two or more persons now owning that said property. These individuals must consider whether they will hold their interest in the land as Joint Tenants or Tenants-in-Common.
What is the difference between Joint Tenancy and Tenancy-in-Common?
Joint Tenancy
Joint tenancy arises where two or more persons hold the property jointly/equally; there is no divisible share of the property. The ownership of the property is determined by the last surviving person (last man takes all); the rule of survivorship applies.
It is important to note that when a joint tenant predeceases the other(s), their interest automatically passes to the surviving joint tenant(s); all that is required to note the change in ownership is the making of an application to note his her/death on the duplicate Certificate of Title. The Application to Note Death along with the Revenue Affidavit must first be lodged at the Stamp Office for death duties to be assessed and paid (where applicable) before taking the Stamp Commissioner’s Certificate (issued after death duties assessed and or paid) to the Title’s Office along with the said Application to Note Death and the Title, for the notation of the death of the joint owner to be made on the actual Title.
It is recommended that surviving joint tenant(s) does(do) not ignore this step; it is best that the current state of affairs concerning the property is reflected on Title.
Lastly, the following rules, “the four unities”, must be satisfied when creating a joint tenancy:
Possession - each joint tenant has an equal right to possess (enjoy together) any part or the whole of the land together. No one party has an exclusive right to any portion of the land to the exclusion of the other joint tenant(s).
Title - the joint tenant(s) ownership in the land is derived from the same act of transfer or document.
Interest - each joint tenant’s interest is the same in nature and duration; together the joint tenants are entitled to the whole land together.
Time - the interest of the joint tenant is vested in them all at the same time.
Tenancy-in-Common
Tenancy-in-Common exists where each owner has a distinct interest/share in the property; this could be in equal (50/50) or unequal shares (2/10, 8/10 etc). On the Title for the subject property, the registered owner’s interest must be specified as tenants-in-common in equal share or tenants-in-common in unequal share with 2/10 to A and 8/10 to B.
Upon the death of an owner, their share becomes a part of his or her estate. The interest in land passes via the terms of their will or where the said owner died without leaving a will, the interest is distributed pursuant to the Intestate Estates and Property Charges Act. For the interest to sufficiently pass to any beneficiary, a Grant of Probate (where a will exists) or a Grant of Administration (where no will exists) must be applied for via the Supreme Court of Jamaica. Thereafter, any applicable death duties and or transfer tax must be paid, and before the personal representative (Executor/Administrator) is registered on the Title by way of a Transmission Application. Finally, the personal representative will transfer to the respective beneficiary/ies.
Unlike joint tenancy, there are two (2) defining characteristics of tenancy in common:
There is no right of survivorship- each owner has a distinct interest/share in the property
The only ‘unity’ that exists between/among tenants-in-common is possession - each co-owner has the same right to possession or enjoyment of the land.
How do I know which tenancy is best for me?
There are a number of factors that one may consider in deciding which tenancy is best for them. Here are a few considerations (just to stir thought; your individual and unique situation may not fit squarely into what is provided below, so be mindful of this):
Do you want to be able to pass your interest to someone else (not necessarily the other person on Title) upon your death? If the answer yes, you may want to consider tenancy in common.
Who are you purchasing the property with?
If you are purchasing with a friend or business partner, you may want to consider choosing tenancy in common.
If you are purchasing with a spouse, joint tenancy is often chosen but there are couples who choose tenancy in common especially where one spouse, or even both, have child/ren from a previous relationship.
If purchasing with a spouse, family member, friend, business partner and one party is contributing more, sometimes significantly more, you may want to consider tenancy in common. This allows the individual contributing more to hold a greater interest in the land.
What is your family dynamic?
If you are purchasing land as part of your retirement plan, and let’s say, you have one daughter/son who you would love to inherit the property at the time of your death, you may opt to add him/her to the property from the initial acquisition of same as joint tenants. It allows for a smoother and more cost-effective transfer to your daughter/son on your death. In this instance, please consult with an Attorney as this may have implications for your child if she/he wishes to use her/his National Housing Trust (NHT) benefit to purchase a property.
How can I sever my Tenancy?
Joint Tenancy
a) by mutual agreement between the joint tenants - the joint tenants may elect to have the tenancy changed to tenants-in-common thus in effect severing their existing joint tenancy. They are now at liberty to treat with their interest accordingly (especially choosing who will inherit same upon their death).
b) by a course of dealing between the joint tenants - the joint tenants are at liberty to sell their interest between/amongst themselves which may either result in a change of tenancy (co-owners in the property now holding distinct interest as tenants in common in equal or unequal shares) or you may now have one owner on title (sole proprietor) or fewer joint tenants (each still holding equal interest) now on Title.
c) by alienation by one of the joint tenants of his share in the property - a joint tenant may elect to dispose of their interest in the property via sale to a third party; the purchaser becomes a tenant-in-common as there is no longer unity of title and time (see above). A joint tenant does not necessarily require the consent of the other joint tenant to sell or transfer their interest.
d) by dispossessing the interest of another joint tenant(s) - a joint tenant can dispossess the interest of another joint tenant where said joint tenant has abandoned (has not exercised any rights of ownership) their interest in the land for twelve (12) or more years.
Tenants-in-Common
a) by transfer via Will or via the Law of Intestacy - each co-owner is able to decide who gets their interest in the land upon their death (if there is a will) or it will pass to their beneficiary based on the hierarchy set out at law (where there is no will).
b) by a course of dealing between the co-owners - the co-owners are at liberty to sell their interest between/amongst themselves (co-owners can buy out the other co-tenants interest) or gift it to another co-owner.
c) by way of sale - a co-owner is freely able to sell his or her share or transfer it at free will (without consent of others) except, where there is an existing agreement in place between/among the tenants-in-common (the agreement may speak to how the interests are to be disposed of; e.g. existing co-owners get first option to buy out another’s interest in the property before they decide to sell to another or to have a say into who the co-owner is deciding to sell to).
d) by commencing a Claim in Court under the Partition Act - one of the owners/the co-owners themselves may seek the Court’s intervention to partition the land, that is, to assist with its physical division. In this case, the court will determine how the property is to be divided based on the interest of each tenant in common. This may prove to be “easier” when the property consists of several acres.
e) by dispossessing the interest of another tenant in common - a co-owner holding interest in land as tenants in common with another can dispossess the interest of that co-owner who has abandoned (has not exercised any rights of ownership) their interest in the land for twelve (12) or more years.
Armed with the foregoing knowledge, careful consideration must be given when deciding to own property with another. There are rights and responsibilities that are attached to your ownership that should not be ignored once you become a property owner. Lastly, seek proper guidance and advice when seeking to deal with your interest in property (while we have sought to capture an overview of tenancy, there are other intricacies that may be applicable/may arise based on an individual’s unique circumstance).
This Article is for general information purposes only and does not constitute legal advice.
By Christine Nunes
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