How title to real estate is held between owners and the legal consequences of that ownership are common areas of misunderstanding that we work through with clients. There are situations where a property owner believes they know what form of ownership they have with other family members for certain real estate, but a title search reveals something different than expected. Also, many do not know what the structure of ownership means, particularly when someone dies or deeds a partial interest to someone else.
Many owners simply use the term “joint owner” in conversation if they own property with someone else. For clarity, the actual wording in a properly drafted deed will determine which type of joint ownership is meant. If the deed indicates that A and B own the property “jointly” or “as joint owners” and nothing else, it means the last survivor owns the property if the joint tenancy was not broken. The joint tenancy can be broken if one of the joint property owners conveys his or her partial interest without the others. This means the other owners remain joint tenants, but the new owner owns a partial interest as a tenant in common and has more rights than the joint tenants.
A joint tenancy with full rights of survivorship, on the other hand, means that the joint tenancy cannot be broken, and the last survivor will own the property. The exception to this is that if ALL the joint tenants convey the property, the purchaser will acquire the entire property.
The default form of real property ownership in Michigan, amongst multiple owners, is tenants in common. Each owner has the right to convey his or her ownership interest separately and, upon a co-owner’s death, that owner’s interest passes by will or statute to his or her heirs. No survivorship right exists in a tenant in common arrangement.
If spouses own real estate together and no other form of joint ownership is indicated, Michigan law presumes that the couple owns the property as tenants by the entireties. Both spouses must participate in any property transfer and, upon the death of one, title passes to the survivor.
Let us know if you have any questions about owning property with multiple owners and how best to structure the ownership for your specific situation. If you need help, give us a call at (248) 477-6300.