A joint tenancy exists when two or more persons, hold title to property jointly as though they collectively were one person. It is created by a single transfer, grant, or will which expressly declares the interest to be a joint tenancy.

The basic idea of a joint tenancy is that of unity of ownership. One title exists and each joint tenant owns the whole along with the rest of the joint owners who also own the whole. It is only for the purpose of sale or mortgage that a joint tenant can be considered as having an undivided interest.

The outstanding feature of a joint tenancy is the right of survivorship by which the interest of a deceased joint tenant passes at death to the surviving joint tenant or tenants. The death of a joint tenant reduces by one the number of persons who own the property. A joint tenant's interest is not capable of being transferred by will. As successive joint tenants die, the remaining tenants acquire the interest of the deceased, with the last survivor taking title in individually.

At common law, a joint tenancy was favored and presumed unless restrictive words were added to limit a grantee's estate to one of tenancy in common. This common-law rule has been abrogated, and nowadays, the legal presumption favors the nonexistence of a joint tenancy.

• Unity of possession--all joint tenancies hold an undivided right to possession.
• Unity of interest--all joint tenants hold equal ownership interests.
• Unity of time--all joint tenants acquire their interest at the same time.
• Unity of title--all joint tenants acquire their interest by the same instrument of conveyance.

The four unities are present when title is acquired by one deed, executed and delivered at the same time, and conveying equal interests to all the grantees, who hold undivided possession of the property as joint tenants.

 

 

 

• Statutory Recognition
  
  In Texas, the joint tenancy is recognized by statute (§101.002, Estates Code & Section §111 & 112, Estates Code for agreements between joint owners or spouses) and case law as a legal form of ownership.
• Instrument Of Creation
  
  A joint tenancy cannot be implied or created by operation of law. A joint tenancy can be created only by:
  • A grant through a deed of conveyance.
  • A devise in a valid will duly probated.
  • Manifestation of Intention - an agreement in writing for joint owners or spouses

The intention of the parties to create a joint tenancy must be clear, manifest, unambiguous, and beyond all possibility of dispute. It should be remembered that statutory and judicial presumptions favor tenancies in common over joint tenancies.

• Language of the Intention
  
  Generally, statutes describe the language necessary to create a joint tenancy. Case law may constitute another source of guidance and information. A joint tenancy is not created in Texas simply by persons being jointly named in a deed.
  
  Depending on the jurisdiction, the following phrases will create a joint tenancy:
  • ”As joint tenants”
  • ”As joint tenants with rights of survivorship”
  • ”As joint tenants with rights of survivorship and not as tenants in common”
  • ”As husband and wife” (unless otherwise stated).

As regards spouses (§112, Estates Code), one of these phrases must be used in the agreement:

•  
  • ”With right of survivorship”
  • ”Will become the property of the survivor”
  • ”Will vest in and belong to the surviving spouse”
• Unities of Title
  
  Unless otherwise provided by state statutes, the four common law unities of title must be present in order to create a joint tenancy.
• Number of Joint Tenants
  
  Two or more persons are necessary in order to create a joint tenancy.
  
  It is a well-accepted principle that a corporation with a perpetual existence cannot become a joint tenant because there would be no mutual right of survivorship, and consequently, the requirement of unity of interest would be violated.
• Direct Conveyance
  
  In many states, the legal necessity of strict compliance with the four unities of title in order to create a joint tenancy does not permit a direct conveyance from a grantor to himself and one or more others as joint tenants. Thus, if real estate is owned in severalty by a person who wishes to create a joint tenancy between that person and others, the owner will have to convey the property to an intermediary (usually called a nominee or straw man), and that nominee must convey it back and name all the parties as joint tenants in the conveyance. Be sure to check for liens against the straw man. Do not use this procedure in Texas on homestead property.

 

The most important characteristic of a joint tenancy is the right of survivorship. Because a joint tenancy is but one estate, it is not possible for any interest to pass by reason of the death of a joint tenant to that joint tenant's heirs or devisees. Interests in joint tenancies are neither devisable nor inheritable (unless in connection with the last surviving survivor tenant).

The survivor's interest in a joint tenancy attaches by means of the original conveyance and not by the transfer from the decedent. The death of a joint tenant has the exclusive effect to extinguish or terminate the tenant's interest in the property.

When a joint tenancy exists, and one of the joint tenants dies, the surviving joint tenants take the whole estate. The doctrine of survivorship is applied until only one joint tenant remains.

The undivided fractional interest of a joint tenant may be subjected to the claims of any creditor of the joint tenant, but unless a creditor reduces the claim to a judgment and causes execution and sale to be had during the lifetime of the debtor-joint tenant, the judgment-creditor will lose the security. Judgments and tax liens against joint tenants can be eliminated as liens or encumbrances on titles upon the death of each joint tenant as long as that the joint tenant is survived by another joint tenant.

A federal tax lien against one joint tenant, like any other kind of lien or claim, is a lien only upon that joint tenant's undivided interest; and, if enforcement is not instituted during the lifetime of the joint tenant, the lien will expire upon the joint tenant's death.

However, in the area of enforcement, there is a fundamental difference between a federal tax lien and any other kind of lien or claim.

Several federal court decisions have permitted the enforcement of a federal tax lien against one tenant by an involuntary sale of the entire land, thereby divesting the ownership of all of the joint tenants and requiring the other joint tenants to accept their proportionate part of the sale proceeds.

When insuring joint tenancy property, if a federal tax lien is found as affecting the interest of a joint tenant, in addition to the showing of the regular federal tax lien, the title commitment or policy must except the right of the federal government to subject the entire fee simple estate in the land to sale upon foreclosure of its lien upon the interest of the joint tenant.

A joint tenancy may be terminated or severed by any of the following causes:

• By the Death of a Joint Tenant
  
  A joint tenancy is terminated upon the death of all but one of the joint tenants.
  
  Several facts must be ascertained before vesting title in the surviving joint tenant(s):
  • That the fact of death has been made a matter of record.
  • That the identity of the deceased joint tenant has been associated with the joint tenancy estate as a matter of record.
  • Whether the deceased joint tenant ever effected a voluntary severance of the joint tenancy.
  • Whether the deceased joint tenant was ever subject to any legal proceedings which effected an involuntary severance of the joint tenancy.
  • Whether any state or federal taxes must be paid or the property determined to be exempt.
• By Voluntary Severance
  
  Unless specifically prohibited by a valid agreement, various acts of an individual joint tenant can cause a severance in the joint tenancy estate. In spite of the “one estate” theory, any joint tenant has the right to convey, encumber or in any other form alienate that joint tenant's undivided fractional interest in the joint tenancy, and thus sever that joint tenant's undivided fractional interest through the elimination of any and all of the four necessary units for the existence of a joint tenancy.
  
  The result of the severance is the conversion of the joint tenancy into a tenancy in common. The joint tenancy, if composed of more than two joint tenants, remains as a joint tenancy in relation to the remaining joint tenants.
  
  The execution by the joint tenant of any of the following instruments in regard to that joint tenant's fractional interest will, for title insurance purposes, cause a severance in the joint tenancy estate:
  • Conveyance to an outsider.
  • Conveyance to himself.
  • Mortgage or deed of trust.
  • Lease.
  • Contract.
  • Specific written revocation (§455, Estates Code).
  • Agreement between joint tenants.
  • Judicial partition instituted by the joint tenant.
• Involuntary Severance
  
  The happening of any of the following acts in regard to the fractional interest held by a joint tenant can cause a severance in the joint tenancy estate:
  • Bankruptcy proceedings.
  • Levy of execution.
  • Enforcement of federal tax lien against one joint tenant.
  • Statutory Lien.
  • Divorce suit (in those states where husband and wife hold title as joint tenants).

Underwriting Standard: You must read the agreement to determine which, if any, of these matters will trigger revocation.