It is very important to choose the right form of ownership when purchasing real property with another person in Illinois. In fact, many buyers do not understand how it affects inheritance, taxes, liability, and sale. There are generally two types of ownership for co-owners: joint tenancy and tenancy in common. It is essential to understand both concepts in order to avoid legal issues in the future. A residential real estate attorney can assist buyers in making the right decision regarding ownership. They can explain the pros and cons of each ownership.
What is Joint Tenancy?
In a joint tenancy, two or more people have equal shares in a given property. This is usually common among married couples. However, it can also occur among friends and business associates. In this kind of ownership arrangement, there is a right of survivorship. This means that when one of the owners dies, their share is automatically given to the remaining owners. In this arrangement, no probate is involved.
In joint tenancy, owners have equal rights to the property. Any decision to sell, refinance, or make any other changes regarding ownership is made with the consent of all owners. A home purchase agreement lawyer can help in reviewing this arrangement to ensure that the rights of both parties are clearly understood.
What is Tenancy in Common?
Tenancy in common is an ownership system where multiple parties own property, but each has an unequal share. In this system, one owner can have 50% ownership, while another owner has only 25%. There is no automatic right of one owner upon death in a tenancy in common. The ownership is transferred through the will.
Tenancy in common is an advantageous system for friends, family, and investors who buy property together. Each owner in a tenancy in common has the right to sell his/her share without permission from other owners. A residential real estate attorney can assist in creating agreements to avoid disputes over expenses, maintenance, and selling.
Key Differences Between Joint Tenancy and Tenancy in Common
The main differences are:
Right of Survivorship
In a joint tenancy, the deceased person’s share passes to the remaining tenants. This is not the case in a tenancy in common, where the share goes to the estate plan or the will.
Share Size
In a joint tenancy, all parties must have an equal interest in the property. This is not the case in tenancy in common, where the interest in the property can be unequal.
Control and Transfer
In a joint tenancy, all parties must consent to the sale or transfer of the property. This is not the case in tenancy in common, where each party can sell or transfer his/her interest in the property independently.
Estate Planning
Joint tenancy can be beneficial in estate planning for spouses. It can also provide more flexibility in tenancy in common.
Advantages of Joint Tenancy
Joint tenancy is a preferred choice for couples, especially for married people, since it:
- Does not require probate since it has a right of survivorship.
- Maintains equal ownership, thus facilitating decision-making.
- Facilitates the easy transfer of property to a spouse upon death.
Despite these benefits, joint tenancy has several disadvantages. For instance, one of the people owning a joint tenancy property may be in debt, thus affecting the property. A real estate attorney for a residential property can provide more information on this.
Advantages of Tenancy in Common
Tenancy in common is beneficial in that it allows for:
- Unequal ownership, thus providing a fair proportion of investment in a property.
- Flexibility, especially for people in business, since it allows for the independent sale of a share in a property.
- Control over inheritance, thus providing a choice of who to leave a share of a property.
How a Lawyer Can Help
The role of a Residential Real Estate Attorney in Elgin:
- Helps the buyer make the right choice in the type of ownership.
- Ensures the deed is completed accurately in accordance with the chosen form of ownership.
- Draft a contract between the co-owners to avoid future conflicts.
- Provides information on tax, inheritance, and liability issues.
The role of a Residential Real Estate Attorney in Elgin ensures that the buyer’s property ownership aligns with their personal objectives. A Residential Real Estate Attorney in Elgin helps the buyer make the right decisions to avoid future conflicts.
Protect Your Shared Property with EJR Law Office
EJR Law Office provides the best guidance on property ownership in Illinois. Our team of skilled residential real estate attorneys helps the buyer understand the differences between joint tenancy and tenancy in common. Our experts provide the best guidance on property ownership in Illinois. With guidance from our experts, the property’s co-owner will be able to protect their property, avoid conflicts, and enjoy the peace of mind needed throughout the process.
