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!