You can own a piece of real estate jointly with another person or persons. Joint ownership means that each co-owner owns a given interest in the entire piece of real estate – usually, each owns an equal, but not necessarily.
What does it mean to co-own property jointly with someone? Even if two people each own an equal interest in a piece of property, there is no physical “half” of it that one can fence off and keep from the other. Instead, each co-owner has the right to use an undivided interest in the whole property along with the right to one-half of the proceeds if the property is sold. If the joint owners cannot agree on how to use the property, a “partition” lawsuit can be filed in court by one of the joint owners where a judge is asked to put an end to the joint ownership and force the sale of the property.
There are different forms of joint ownership. The rights and obligations that result from them depend on the language that is used in your deed. Here are different forms of joint ownership and a few notes about the rights of the co-owners in each situation:
Joint Tenants with Rights of Survivorship (“JTWRS”): If one co-owner dies, the surviving co-owner(s) automatically own the deceased person’s interest. If you are the survivor, you need only file an affidavit when the other co-owner dies in order to take good title to his or her portion.
Tenants in Common (“TIC”): This form of joint ownership does not include survivorship rights for the co-owners. If one co-owner dies, his or her Last Will and Testament likely controls what happens to his or her interest.
Life Estates: In this arrangement, a person has ownership rights in a piece of property that last only for the length of time that the person is alive. A life interest is not perpetual, and it is generally followed by a “remainder” interest granted to some other person(s).
Property rights are said to be like a bundle of sticks. Each aspect of property (right to use, responsibility to pay taxes, mineral rights, wind farm rights) is one of the sticks in the bundle. Owners or co-owners with full ownership rights (called a “fee interest”) hold the entire bundle of sticks. Under a life estate, one person holds onto the right to occupy and use the property along with the responsibility to pay the taxes (the life estate holder). Another person(s) (remainderman) hold(s) the rest, and when the first person dies, those property right “sticks” transfer to the second person(s).
The remaindermen have some rights even while a life estate holder is still alive. For example, the remaindermen can prevent “waste” of the value of the property, such as logging trees from the property or the demolition of good quality buildings. As a caveat, enforcing these rights can sometimes turn into an expensive litigation battle. In such cases, it is suggested that the remainderman first try to use an agriculture mediator to help resolve the dispute.
This is an excerpt from my first book that I co-authored with Pat Dillon, an Iowa agriculture lawyer titled “Field Manual: Legal Guide for New York Farmers and Food Entrepreneurs” available on CreateSpace, Amazon, Kindle and iBooks. You can find out more about this book here.