Do you know the difference between owning property with others as tenants in common versus owning property as joint tenants? If you don’t then this article should interest you.
I was recently consulted by Mariah (fictitious name). She has been engaged in a business arrangement with Harold (fictitious name). Under the arrangement Harold would identify properties in Grenada which could be purchased at a bargain price. Mariah would come up with the money. And the property would be shared 80% to Mariah and 20% to Harold.
On one occasion Harold actually came up with some of the money and Mariah and Harold agreed that the property would be shared equally.
Realising the benefits of the arrangement with Harold, Mariah sought to use the same arrangement with Andrew (fictitious name). Andrew identified a lucrative property in L’Anse Aux Epines and Mariah sent the money for Andrew to purchase the property.
Mariah noticed that the deeds related to the properties she purchased with Harold, described the properties as being conveyed to Mariah and Harold as Tenants in Common as to 80% share to Mariah and 20% share to Harold. On the occasion where they decided that the property would be shared equally, the deed stated that the property was conveyed to Mariah and Harold as tenants in common in equal shares.
However, the deed for the property in L’Anse Aux Epines stated that it was conveyed to Mariah and Andrew as Joint Tenants. Mariah did not put much on the difference but she was a bit curious.
Doctrine of survivorship
I explained to Mariah that it made a world of difference whether the property was conveyed to two or more persons as tenants in common or as joint tenants.
Where property is conveyed in a deed, the persons named in the deed become the new owners of the property. So for example, where property was conveyed to Maria and Harold, they became the new owners of the property.
Where property is owned by two or more persons as tenants in common, each owner has an undivided share in the property. So for example, where Mariah and Harold owned property as to 80% for Mariah and 20% for Harold, Mariah and Harold together were owners of the whole property. But their specific shares were not identified. Mariah could not do a plan for her 80%. Nor could Harold do a separate plan for his 20%. However, Mariah could sell her 80% even if Harold decided to keep his 20%; and vice versa. They could sell separately because they owned separate though undivided shares.
Where property is owned as joint tenants by two or more persons, each person owns the whole property together with the others. There are no separate shares.
The important difference between tenants in common and joint tenants is that the so called doctrine of survivorship applies to joint tenancy but not to tenancy in common.
The doctrine of survivorship means that where property is owned by two or more persons as joint tenants, and one dies, the property continues to be owned by those who survive.
Hence in the case of Mariah and Andrew where the deed described the property as being conveyed to them as joint tenants, if Mariah dies, Andrew inherits the property as his solely; and vice versa.
On the other hand, in the case of Mariah and Harold, where the property is conveyed to them as tenants in common, if Mariah dies, her share of the property does not go to Harold. It goes to whoever she leaves it for in her Will; or to whoever is entitled to it if she does not make a Will.
So next time you buy or obtain property together with another or others, examine carefully whether the property is conveyed to the new owners as tenants in common or joint tenants. The deed will say.
JOSEPH EWART LAYNE
This article is for general information purposes only. Its contents do not constitute legal advice. Before you act on any matter in this article, seek advice from an attorney-at-law.
Joseph Ewart Layne is the Principal of JEL Professional Solutions Inc. He is a graduate of Hugh Wooding Law School; he holds a LLB (Honours) and a LLM (Corporate & Commercial Law) from London University and a LLM (Legislative Drafting) from UWI, St. Augustine. He also holds a BSc. (First Class Honours) in Applied Accounting from Oxford Brookes University and is an ACCA Affiliate.
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