Cotenancy
Definition
Cotenancy refers to any arrangement of multiple ownership in real estate where two or more parties hold title to a property together. This includes forms such as:
- Tenancy in Common: Each co-owner holds a distinct, undivided interest in the property. Each has the right to transfer their interest without needing consent from the others.
- Joint Tenancy: Co-owners hold an equal share of the property with the right of survivorship, meaning when one owner dies, their interest passes to the remaining owners.
Examples
- Example 1: Adam and Brenda purchase a duplex as tenants in common. Adam holds 60% interest, and Brenda holds 40%. They can sell their shares independently.
- Example 2: Carlos and Diana buy a house as joint tenants. If Carlos passes away, Diana automatically inherits Carlos’s share and becomes the sole owner of the property.
Frequently Asked Questions (FAQs)
Q1: What are the key differences between Tenancy in Common and Joint Tenancy?
- A: In Tenancy in Common, co-owners can have unequal shares and can will or sell their portion independently. In Joint Tenancy, co-owners have equal shares, and the share of a deceased owner automatically transfers to surviving co-owners.
Q2: Can a cotenant force the sale of the property?
- A: Yes, any cotenant can file a partition action to force the sale of the property. The court may then order the sale and distribute the proceeds according to each cotenant’s share.
Q3: Are cotenants equally responsible for property expenses?
- A: Generally, yes. All co-owners are typically responsible for their proportionate share of property-related expenses like taxes, mortgage payments, and maintenance.
Q4: What happens if one cotenant wants to sell and the other doesn’t?
- A: The selling cotenant can either sell their interest independently or can seek a court order for partition, which may result in the sale of the entire property.
Q5: Does the share of a cotenant pass automatically to others upon death?
- A: This depends on the form of cotenancy. In Joint Tenancy, the deceased’s share passes automatically to other co-owners. In Tenancy in Common, the deceased’s share will be inherited by their heirs or designated in their will.
Related Terms
- Fee Simple: The most extensive interest in land that one can possess, meaning ownership outright with no limitations on inheritability.
- Right of Survivorship: A feature of joint tenancy where the surviving co-owner(s) automatically inherits the share of the deceased co-owner.
- Partition Action: A legal action taken to divide property among co-owners, which can result in a sale and distribution of proceeds if the property cannot be divided equitably.
Online Resources
- Nolo - Cotenancy Details
- Investopedia - Tenancy in Common
- Zillow - Home Buying Guide for Multiple Owners
References
- Miller, Roger Leroy. “Real Estate Principles and Practices.”
- Smith, Benton E. “Real Estate Investing: Market Analysis, Valuation Techniques”
Suggested Books for Further Studies
- “Investing in Real Estate, Sixth Edition” by Gary W. Eldred
- “The Book on Rental Property Investing” by Brandon Turner
- “Real Estate Principles: A Value Approach” by David C. Ling and Wayne R. Archer
Real Estate Basics: Cotenancy Fundamentals Quiz
### What does cotenancy refer to?
- [ ] Single ownership of property.
- [x] Multiple ownership of property.
- [ ] Leasing property to multiple tenants.
- [ ] Owning property in trust.
> **Explanation:** Cotenancy is a term that describes multiple ownership of a property in various forms, including Tenancy in Common and Joint Tenancy.
### What distinguishes Tenancy in Common from Joint Tenancy?
- [ ] Tenancy in Common includes the right of survivorship.
- [x] Tenancy in Common allows unequal ownership shares.
- [ ] Joint Tenancy allows for individual wills.
- [ ] Joint Tenancy does not permit selling shares.
> **Explanation:** In Tenancy in Common, co-owners can hold unequal shares of the property. Joint Tenancy requires equal ownership shares and includes the right of survivorship.
### In the event of a cotenant's death in joint tenancy, what happens to their share?
- [x] It automatically becomes the property of the surviving co-owners.
- [ ] It goes to the deceased cotenant's heirs.
- [ ] It is sold, and the proceeds are distributed.
- [ ] It is transferred to a designated trustee.
> **Explanation:** Joint Tenancy includes the right of survivorship, which means the deceased’s share is automatically transferred to the remaining co-owners.
### Can a cotenant sell their interest in Tenancy in Common?
- [x] Yes, without the consent of the other cotenants.
- [ ] No, permission from other cotenants is needed.
- [ ] Only if the property is fully paid off.
- [ ] Only if they have the majority share.
> **Explanation:** In Tenancy in Common, each cotenant can freely sell or transfer their share without the need for consent from the other owners.
### What legal action can a cotenant take if they want to sell but the others don't?
- [ ] Eviction process.
- [ ] Foreclosure.
- [x] Partition Action.
- [ ] Eminent Domain.
> **Explanation:** A Partition Action is a legal procedure where a cotenant who wants to sell their share can force the sale of the entire property to divide proceeds among all cotenants.
### In Tenancy in Common, how is responsibility for expenses typically divided?
- [ ] The cotenant with a larger share pays more.
- [ ] Expenses are paid only by the primary occupant.
- [x] Each cotenant pays proportionate to their ownership interest.
- [ ] The co-owner with less share is exempt.
> **Explanation:** In Tenancy in Common, all co-owners are usually responsible for their proportionate share of property-related expenses.
### What happens if a property owned through Tenancy in Common is sold?
- [ ] The sale proceeds go to the highest shareholder.
- [ ] Only the designated cotenant gets the proceeds.
- [x] Proceeds are divided according to ownership shares.
- [ ] The government takes a portion first.
> **Explanation:** Sale proceeds from a property held as Tenancy in Common are divided according to each owner's percentage of interest.
### Which feature is unique to Joint Tenancy?
- [ ] Beneficiary allocation.
- [x] Right of Survivorship.
- [ ] Unequal shares allowed.
- [ ] Sale without consent.
> **Explanation:** The unique feature of Joint Tenancy is the Right of Survivorship, where the deceased's share is automatically transferred to the remaining co-owners.
### Why might co-owners choose Tenancy in Common?
- [ ] To ensure equal shares.
- [ ] To avoid separate taxation.
- [x] For flexibility in selling or bequeathing their share.
- [ ] For automatic transfer on death.
> **Explanation:** Co-owners might choose Tenancy in Common for the flexibility it provides, allowing them to sell or bequeath their shares independently of the other owners.
### How can disputes among cotenants (like one wanting to sell) often be resolved?
- [ ] Mediation.
- [ ] List property together.
- [ ] Give up shares.
- [x] Court-ordered partition.
> **Explanation:** Disputes where one cotenant wants to sell, and others don't, are commonly resolved through a court-ordered partition of the property.
