Tenancy Agreements

Buying a home or property is one of the biggest decisions any person can make. It can be a complicated process, especially when buying with another person. Whether a couple is legally married or not, there can be many complications that arise if a couple decides to split up. What can be done with the property and what are the legal rights of the owners are points that should be clearly understood before signing any papers.

To help navigate you through these murky waters, Parker Scheer will explain the various types of tenant agreements and what they mean for division of property; tenancy in common, joint tenancy and tenancy by the entirety.

The distinguishing features among the three forms of tenancy, while subtle, are extremely important. Generally, the way the forms of tenancy have been distinguished are by reference to legal “unities.”

The first type of tenant agreement is tenancy in common, which involves only one legal unity, possession. Two or more people can hold title to real estate as tenants in common and the only right they need to share is the right of possession. They may own different stakes, or portions, of interest; the interests can be acquired different times and the title to each share can be held in different forms. For example, two people can own one building, with one person owning three quarters and the other owning only one quarter.

A tenancy in common might be thought of as a more “commercial” form of tenancy, in that each tenant in common may freely acquire a greater share or sell their share, without affecting the rights of the other tenants. The right of a tenant in common who passes away does not flow to the other tenants, but to the heirs.

A joint tenancy requires four unities: time, title, interest and possession. To create a valid joint tenancy, it must typically be done by way of a single instrument (usually a deed) vesting equal ownership interests in two or more people. This is the preferred form of ownership of an unmarried couple. As with a joint tenancy comes a right of survivorship, meaning that if one of the joint tenants dies, their interest passes to the other owner directly and not through probate. The property is also not subject to the claim of family.

A tenancy by the entirety is nearly identical to a joint tenancy, but to take title as tenants by the entirety, a couple must share the additional legal unity of being married at the time they take title. The survivorship right is identical to that of a joint tenancy. One additional benefit to a couple owning property at tenants by the entirety is that as long as the couple is married and maintains the property as their principal residence, no creditor may execute and collect against the equity in the property.

A big question that can arise if there is dissolution of a relationship is what is to be done with the property. In the cases of a married couple seek a divorce, the division of property will decided in divorce court.

For tenancy in common and joint tenancy, one must go through a different legal channel to separate the property.

Contact a Massachusetts Real Estate Lawyer

For more information on buying a first home in Massachusetts, or if you are looking for a real estate lawyer in Massachusetts, please contact Rob D. Stewart. If you prefer, you can also telephone our offices in Boston seven days a week at toll free 866-414-0400.

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