This past week my husband and I sat down to purchase property in New York. As we prepared to sign the deed at settlement, our settlement attorney informed us that our deed reflected we were taking tenancy as “joint tenants with common law rights of survivorship”. We informed her that as a married couple, we wanted to take tenancy as “tenants by the entirety with common law rights of survivorship.” “Same thing,” she replied.
Lesson one: be wary of lazy settlement agents/attorneys. The latter two forms of tenancy are absolutely not the same thing. Our attorney simply did not want to change the language on the deed because it takes time, and she had a full day of settlements. Had we not been attorneys, we may not have known to insist that she change the language, and we may have paid for it down the line. This is why it is important to partner with a reputable, trusted title company like Highland Title & Escrow, rather than steer your client to the title company whose fees are lowest or pens are shiniest.
Lesson two: there are four main types of tenancy, which is how a person takes title to a property either individually or with another person(s):
Tenants by the entirety with common law right of survivorship. This form of tenancy is reserved for married couples. When one spouse passes, the property automatically vests in the surviving spouse. In addition, if one spouse has a judgment against him or her, it does not attach to the land. This means that when the married couple sells their property, the judgment does not need to be paid off at or prior to settlement.
Joint tenants with common law right of survivorship. Like the previous form of tenancy, if one tenant passes, the property automatically vests in the surviving tenant. All tenants have an equal shares of the property. If one tenant sells his or her share, the tenancy changes to tenants in common.
Tenants in common. Unlike the previous forms of tenancy, there are no survivorship rights for tenants in common. If one tenant passes, his or her share is passed to his or her estate unless his or her will states otherwise, rather than to the remaining tenants. Tenants in common may also own unequal shares of the property: one tenant may own 50% while the remaining two tenants own 25% shares.
Individually. A person will take title individually if he or she is buying the property in his or her sole name.
If you or your client has a question about taking tenancy, consult an attorney. To ensure your client is given the care and attention he or she needs at settlement, call one of our settlement attorneys or agents at Highland Title & Escrow (703) 723-3300.