Owning A Property As An Unmarried Couple: Joint Tenancy Or Tenants-in-Common
A freehold estate is an property wherein you could have exclusive privileges or rights to for an indefinite period of time, even for a lifetime. On the other hand, a less than freehold estate is only for a certain and set period of time. Either way, owning such properties could be a good investment especially if one knows how to properly manage and make use of it.
Joint Tenants Or Tenants-in-Common
Nowadays, increasingly more couples cohabitate even before they tie the knot, whereas others live together for an indefinite period without the thought of ever getting married at all. Many unmarried couples who have lived together amass a lot of shared property, however they frequently fail to take into account how these shared properties are to be distributed if the event the relationship comes to an end. In fact, if the couple’s relationship ends, when it has to do with property the law will still effectively consider the pair as separate individuals having no responsibilities or rights regardless the length of the relationship.
Prior to jointly purchasing a home or other significant assets with your partner, agree as to how the property would be owned. In doing so, you will safeguard your rights in case of a break up or a death. Essentially, you will have to make a decision on whether the property will be owned as joint tenants or as tenants-in-common.
Joint Tenants (Rights of Survivorship)
Joint tenancy is a type of ownership wherein it is equally shared. Each joint tenant with jointly-owned properties have parallel interests. When joint tenancy is specified and one of the property owner dies, the living owner(s) automatically take possession of the share of the person who have died.
With tenants-in-common, each owner has a separate share or portion in the property. You will have to agree on the share percentage. For instance, if one owner provides 25% to the buying price, that owner’s contribution of the property can be a basis of that share percentage. Unlike joint tenancy, in the event that a co-owner passes away, the living co-owner doesn’t have any rights to his/her property share. Instead, it becomes part of their estate and be apportioned as stipulated by that individual’s will or by the intestacy laws of the state.