When buying a new home you may hear the terms “joint tenants” and “tenants in common,” but what do these terms really mean and how do they apply to you?
When two or more individuals purchase a home together, they need to consider what sort of legal relationship they wish to have. When spouses purchase a property, they often do so as “joint tenants with rights of survivorship”: this means that each spouse holds an undivided interest in the property and will inherit the other spouse’s interest upon their death. This is the most common form of joint property ownership, particularly among married couples. However, there are other ways to take title to a property that parties may want to consider, particularly in the case of unmarried couples.
When an unmarried couple begins to look at purchasing a home together, they may want to consider doing so as “tenants in common”. Unlike joint tenancies, owning property as a tenant in common enables each owner to will their interest in the property to a third party, or else have their share pass to their heirs at law via intestacy. Such ownership can be beneficial for unmarried couples, as it allows for easier control and division of assets, and permits each party to decide who will inherit his or her share in the property.
If a couple chooses to be tenants in common, rather than joint tenants, they may also consider drafting a “tenants in common” agreement, spelling out the terms of the ownership and legal relationship between the parties. Such an agreement can help the parties agree in advance for matters such as how much each individual will contribute to the initial costs of purchasing the home, how the parties will deal with repairs and improvements, and what the parties will do in the event one or both of them wishes to sell the home. This has the added benefit of protecting everyone’s interest in the event the couple breaks up. Unlike in divorce, when an unmarried couple splits, the court does not generally get involved in assisting with a division of assets. A “tenants in common” agreement can help fill that need.
Deciding on a form of property ownership is a serious decision, and one that involves the consideration of many factors not discussed in this blog post. We recommend that you consult with an attorney before purchasing real estate.
If you have a question about real estate or land use law or family law, contact the experienced attorneys at Welts, White & Fontaine by calling (603) 883-0797 or using the form here. Welts, White & Fontaine is Nashua’s largest law firm and serves the legal needs of both individuals and businesses in towns such as Amherst, Milford, Hudson, Brookline, Windham, Hollis, Merrimack, Litchfield, Bedford, Londonderry, Pelham, and of course Nashua.
This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion, or forming an attorney-client relationship.