Understanding Different Forms of Residential Real Estate Ownership in New Jersey

Photos by Randen Pederson

In New Jersey, purchasers of real property have different forms of ownership options. There is significance in which option is selected because it will affect multiple things, specifically, the purchasers right to sell the property or leave the property to heirs.

In the case of residential real estate, it is important that all purchasers determine the most appropriate and advantageous form of ownership as either a sole owner, or co-owner.

Sole ownership, as its name implies, is when title is held by one owner. Advantages to being an individual owner include the avoidance of any type of conflict that would arise between multiple owners, as well as the ease in which real property can be transferred and disposed.

Regarding co-ownership, New Jersey recognizes three forms; Joint tenancy with rights of survivorship; Tenancy in common (Tenants in Common); Tenancy by the entirety (Tenancy by the Entirety).

Joint Tenancy with Rights of Survivorship

A joint tenancy with rights of survivorship (commonly referred to as joint tenancy) gives two or more persons an equal and undivided right to use and possess real property. This is most commonly used when individuals who are not married would like rights of survivorship.

Tenants in Common

A tenancy in common gives two or more persons an undivided fractional ownership interest in real property. Each co-owner has an equal right to possess the whole property, but without the right of survivorship. Individuals that own real property as tenants in common may own unequal interests and the percentage interest of each individual co-tenant is determined by the terms of the tenancy. 

Tenancy by the Entirety

A tenancy by the entirety is the tenancy held by a married couple on their joint acquisition of title after marriage. This form of ownership conveys title to the married couple as one person, with title transferred to the other in the entirety on the first death. When real property is conveyed to a married couple, a tenancy by the entirety is automatically formed by default unless the deed specifies another form of ownership (N.J.S.A. 46:3-17.2).

There is much more to the depth and scope of ownership types not included in this article, as well as the advantages and disadvantages of each.  Selecting the appropriate type for your personal situation is key. If you have additional questions or are currently experiencing real estate ownership issues, we are here to help!

Buying a Home – Considering a Home Inspection? What You Should Know…

Let’s begin with the alarming truth that home inspections are not required in New Jersey. Contrary to what many believe, there is no legal obligation on buyers, sellers, agents or brokers to ensure a home inspection is conducted before the purchase of a home. This follows whether it is new construction or a 100-year-old Victorian.

You may wonder why there is no federal or state guidance in this seemingly important area of the real estate transaction, and a guess could be that caveat emptor or “let the buyer beware” is still firmly rooted in American transactions. Whatever the reason, in today’s world, home buyer’s may still need to beware, but can now be certain: with a simple home inspection. 

For those who think they can “deal with it later” …

By opting not to have a home inspection, you are placing yourself in a position where you will most likely lose the right to make additional requests for repairs that aren’t agreed to at the time of signing the initial purchase contract. This can sometimes come as a shock, but the sales agreement and everything within it will dictate each parties’ rights regarding inspections.

For those looking to save a little money …

Home inspectors are trained to discover defects in a home’s foundation, mold, water damage, and other potentially hazardous conditions. If not discovered, the damage from those defects alone could cost you hundreds to thousands of dollars. So, if you’re looking to save money in the short run, just consider the price you could end up paying in the long run. (Inspections in NJ typically range $357-$582).

For those who believe they are the “home inspector” …

In New Jersey, home inspectors are licensed and strictly regulated by the Home Inspection Advisory Committee under the Board of Professional Engineers and Land Surveyors.

Unless you can thoroughly inspect and efficiently identify defects in each of the areas below during a routine walk-through, then it is highly recommended that you leave it to the professionals.

  • Exterior of the home
  • Home’s foundation
  • Exterior walls of the home
  • Roof coverings, flashings and gutters
  • Roof support structure
  • Attic
  • Basement
  • Quality of insulation
  • Garage
  • Electrical wiring, outlets and breaker
  • Visible interior and exterior plumbing
  • Central air and heating system
  • Overall interior condition of the home

New Jersey Realtors recommends using the International Association of Certified Home Inspectors to begin your search for the right home inspector.

Update on Private Well Testing Coming December, 2021

New Jersey law requires buyers or sellers of property to test the water before the sale and review the results prior to closing. Landlords are also required to periodically test and to provide tenants with test results. This test has traditionally been for a specific type and amount of microorganisms that are potentially harmful to human health. But for those of you looking to lease or sell in NJ after December 1, 2021, be aware that those requirements are getting even stricter. The New Jersey Department of Environmental Protection (NJDEP) has adopted additional amendments to the Private Well Testing Act (PWTA) rules that require testing for three per and polyfluoroalkyl substances (PFAS) compounds: perfluorooctanoic acid (PFOA), perfluorooctanesulfonic acid (PFOS), and perfluorononanoic acid (PFNA).

What are PFOA, PFOS, and PFNA?
PFOA, PFOS, and PFNA are included within a group of man-made PFAS chemicals. According to the United States Environmental Protection Agency (EPA), PFAS have been used in industry and consumer products since the 1940’s with PFOA and PFOS being the most widely used and studied of the PFAS chemicals.

As per the EPA, current scientific research suggests that exposure to high levels of certain PFAS may lead to adverse health effects and more research is underway to better understand the health effects associated with low levels of PFAS exposure over long periods of time. There are a variety of ways that people can be exposed to PFAS chemicals, including drinking water that is sourced from a contaminated private drinking water well.