Joint tenancy is an option where two or more persons hold undivided shares of a particular property – such as spouses who want both their names on the title. However, there are many elements of joint tenancy to keep in mind: such as what’s your property is also your joint partner’s property. Should one member be in default or in debt, the lender is within their rights to seize your joint property to pay off your co-owner’s debt.
Consequently, joint tenancy is a popular option with spouses, rather than business partners, because of the benefits that joint tenancy affords. Should one spouse pass away, the title automatically transfers to the other spouse’s name, meaning the property is still within the family.
Other benefits to joint tenancy include:
Tax benefits: Joint ownership may allow owners to take advantage of various tax benefits and be recused from others, such as state gift tax requirements.
Rights to rent: Joint owners are entitled to a proportionate share of the rent paid by third parties, regardless of any relationship between a joint owner and a renter.
Rights to profit: Should any profits derive from the land the property resides on, joint owners are entitled to a proportional share. This may include the discovery of natural resources such as oil, minerals, or gas. It can also include any commercial profits or revenue.
One item that can be both a positive and a negative is the issue of inheritance rights. Should one joint tenant pass away, the title is transferred to the surviving joint tenant(s). The deceased has no ability to transfer ownership of their part of the joint tenancy to their children or other family members through inheritance.
If you’re thinking about joint tenancy, you should consider there is an increased level of responsibility: As a joint tenant, you are responsible for your share of the mortgage, taxes, maintenance and upkeep. You are also responsible for compensating the other joint tenants should you damage the land or property.
As you consider joint tenancy, consider what your situation and individual needs require, as what might be a disadvantage to one person may be an advantage for you and vice versa. As your local title company in Columbia, we’re happy to provide you with more details and help you decide if joint tenancy is right for you. Give us a call today to learn more.
If you have any questions, please contact the Maryland real estate insurance experts at Colony Title Associates by calling 410 884-1160 or visit ColonyTitle.com today!
About Colony Title Associates:
Founded in 1995, Colony Title Group handles in excess of 2000 real estate closings per year in the central Maryland area. The founder Tee Tillman has over 23 years experience in the title and real estate law fields. Colony handles closings for several lenders, including banks, credit unions and mortgage brokers. Colony is the preferred choice for many real estate brokers in the area.
Colony Title specializes in real estate title insurance, real estate settlement services, and real estate closings in Baltimore, Columbia, Maryland, Washington DC, and Virginia. Our staff consists of licensed Title Insurance Agents, Real Estate Agents, Settlement Processors, & Attorneys to handle all of your real estate needs.
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