Joint tenancy is a legal agreement that expounds on the ownership right among co-owners of the property. Joint tenancy can also apply to bank accounts and brokerage accounts; however, it is preferred for real estate investment. This type of ownership has both advantages and disadvantages, as expounded in the article below.
Purchasing a house or any other property is a huge investment that can financially drain you if you aren’t prepared for it. With co-ownership, the property becomes more affordable since each party will contribute an equal share towards purchasing the property. In addition to this, you will be able to access a huge mortgage while you purchase the property in co-ownership compared to when you purchase it when you are alone.
Immediate and Automatic Transfer Upon Death
Property transfer cases after the death of the original owner are usually hectic. There will be no need to file a case in court to transfer the property to the surviving partners in case of the death of one partner. The surviving partners will equally share the deceased property ownership holdings. For instance, if three partners own a property and one dies, the remaining two partners will equally share one-third of the deceased property holdings.
In joint tenancy, all parties have a right to enjoy a proportional share if the property is rented out. The co-owners should also open an account where the tenants will be channeling their rent monthly.
If the co-owners decide to sell the property, they will have to share the proceedings proportionally to their initial contributions. The co-owners are entitled to share any commercial revenue or profits from the property.
Minimal Attorney Fees While Probating the Property
Couples have turned to own property as revocable trusts and community property thus saving a lot in attorney fees. You will be assured that by hiring an attorney, there will be a minimal cost in formulating a joint tenancy deed compared to the costs of formulating a corporation, partnership, or even a trust.
Lack of Inheritance
Once one of the co-owner dies, the remaining partners equally divide their initial share. This hinders the family of the deceased owner from inheriting the property.
Consultations before making any decision are paramount in joint tenancy. At times arriving at a common decision may be difficult, more so if one party seems to disagree on the same. You can’t have the freedom to make abrupt decisions during emergencies.
Each co-owner must cater to their proportionate share of mortgage payments, taxes, or other dues related to the property. In case of maintenance or renovation in the property, all the partners are responsible for contributing towards the same.
Joint tenancy is a good way of owning property easily however it has its advantages and disadvantages. When getting into a joint tenancy, ensure you can easily get along with your co-owners.
You can always consult Toews Law Group attorneys in San Luis Obispo, California for any clarifications regarding joint tenancy and how to go about it. Toews Law Group’s goal is to provide best service at a competitive price in each of their practice areas. You can call them directly or visit their office located in San Luis Obispo for more information regarding buying a property in joint tenancy.