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  • Carolyn Treglia

Forms of Joint Ownership in New Jersey

Updated: Apr 29

There are three basic forms of joint ownership: Tenancy in Common, Joint Tenancy, and Tenancy by the Entirety. It is important to be familiar with the consequences of these types of joint ownership if you own property jointly.


Tenancy in Common


A tenancy in common exists when two or more people own an undivided interest in the whole property. Each owner has the right to use and occupy the entire property and can transfer his or her ownership interest to a third party.


In New Jersey, when two or more people take title to real property, unless the deed states otherwise and unless the people taking title are married, a tenancy in common is created. N.J.S.A. 46:3-17.


When a tenancy in common is created, it is presumed that the property is owned equally amongst each co-owner. However, the deed can specify otherwise. For example, say there are three owners: Owner A, Owner B, and Owner C. Owner A and Owner B may each own twenty five percent (25%) of the property, while Owner C owns fifty percent (50%) of the property as a whole. This must be indicated on the deed.


There is no right of survivorship in a tenancy in common. This means that when one owner passes away, his or her interest in the property will not pass to the surviving owner. Rather, his or her interest will pass pursuant to the terms of his or her Will.


Joint Tenancy


A joint tenancy is a form of joint ownership that has the right of survivorship. When one joint tenant passes away, his or her interest in the property passes immediately and automatically to the surviving joint tenant. Holding property as joint tenants with the right of survivorship is a technique often used to avoid probate. No matter what the Will of the deceased co-tenant states, the property passes to the surviving tenant.


For example, say Owner A and Owner B own a property, 1 Blackacre Drive, as joint tenants with the right of survivorship. Owner A passes away. Owner A’s Will says that his interest in 1 Blackare Drive shall pass to his son upon his death. Owner A then passes away. Who is entitled to Owner A’s share of 1 Blackacre Drive - Owner A’s son or Owner B? Owner B, and that is because the moment Owner A died, his interest passed to Owner B. In other words, the right of survivorship language in a deed trumps the language in the Will.


Joint tenants may sell or transfer their interest during their lifetime but doing so will sever the joint tenancy and terminate the right of survivorship. In addition, a joint tenant who wishes to sell his or her individual share must have the consent and signature of the other tenant in order to do so. The person to whom the joint tenant’s interest is conveyed becomes a tenant in common with the remaining co-owner.


Tenancy by the Entirety


A tenancy by the entirety is a form of joint ownership that is only available to spouses. When a husband and wife take title to real property together, unless otherwise expressed in the deed, a tenancy by the entirety is created. N.J.S.A. 46:3-17.3. The deed need not specifically state that the husband and wife are taking title as tenants by the entirety. Language which states “…… and ……, his wife” or “…... and …..., her husband” shall be deemed to create a tenancy by the entirety. N.J.S.A. 46:3-17.2.


There are three important attributes to a tenancy by the entirety: survivorship, inseverability, and creditor protection.


First, just like a joint tenancy, in a tenancy by the entirety, there is a right of survivorship. This means that when one spouse passes away, their interest in the property will immediately pass to the other spouse by operation of law. Since both owners are spouses, the transfer upon death to the surviving spouse is not a taxable event.


Second, insevarability means that neither spouse has the authority to sever, alienate, or otherwise affect his or her share of the property without the written consent of the other spouse. N.J.S.A. 46:3-17.4. This applies both during the marriage as well as while the couple is separating.


Lastly, a tenancy by the entirety provides certain protections against creditors. If a creditor obtains a judgment against one spouse, the creditor cannot levy against the property or force it to be sold to satisfy the judgment.


The information contained in this post is for informational purposes only and is not intended to serve as legal advice. If you have any questions or would like to schedule a consultation, you may email us at ctreglia@twrealestatelaw.com or call us at 201-595-0399.

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