When a single individual purchases real estate in “fee simple,” which is outright ownership of the land, they hold a 100% interest in the property. When more than one person owns property together, a “tenancy” situation is created. “Tenancy” here does not mean how it is most commonly used today; no one is renting property from anyone else. Rather, “tenancy” refers to the fact that multiple people have a possessory right in the property. You are most likely to see tenancy language in a deed, but other real estate documents may refer to a tenancy situation.
There are three kinds of tenancy widely recognized in the US: tenancy in common, joint tenancy with right of survivorship, and tenancy by the entirety. Washington only recognizes tenancy in common and joint tenancy with right of survivorship. See Ch. 64.28 RCW.
“…John Doe and Jane Doe, as tenants in common…”
John and Jane each own an undivided share in the property. An “undivided share” means they each have a certain percentage of interest in the property, but the property is not being physically divided between them and they each have a right to occupy the entire property. When John dies, his heirs will inherit his interest in the property, and when Jane dies, her heirs will inherit her interest. There can be any number of tenants in common, and they do not need to have evenly-divided shares. Tenancy in common can also be created in any number of transactions. For example, if John currently has a fifty percent interest in the property, he can transfer his interest to two other parties, who would then each have a 25% interest while Jane keeps her 50% interest.
Tenancy in common is the default tenancy. If a property is owned by more than one person and the tenancy situation is not specified or is ambiguous, it will be interpreted as a tenancy in common.
“…John Doe and Jane Doe, as joint tenants with a right of survivorship, and not as tenants in common…” or “…John Doe and Jane Doe, as joint tenants with a right of survivorship…” or simply (and arguably insufficiently), “…John Doe and Jane Doe, as joint tenants…”
John and Jane each own an undivided half share in the property, and whoever outlives the other will inherit the half they do not currently own. For example, if Jane dies first, John will own the property outright and Jane’s heirs will not inherit any interest in it.
A joint tenancy must have what’s sometimes called the four unities: unity of time, title, interest and possession. Unity of time means that each owner must receive their interest at exactly the same time. Unity of title refers to the fact that the joint tenancy must be established in a single deed or other document. So, while John is free to sell his interest in the property, the new purchaser will be a tenant in common with Jane, not a joint tenant with Jane, and the right of survivorship will be extinguished. Unity of interest means each party must have an equal interest in the property. Two joint tenants must each have a half-interest in the property; three must each have a third-interest; four must each have a fourth-interest, etc. Unity of possession refers to the fact that, like tenants in common, the interests owned by joint tenants are undivided so each party has a right to access the entire property.
Creating a joint tenancy requires more verbiage than a tenancy in common because a tenancy in common is the default tenancy, and ambiguous language is interpreted as a tenancy in common. Courts have expressed reluctance to enforce a right of survivorship where non-lawyers draft deeds stating only “as joint tenants” out of concern that the parties did not understand the potential right of survivorship.
Washington does not recognize tenancy by the entirety. A tenancy by the entirety is similar to a joint tenancy with right of survivorship but reserved for married couples and only recognized in about half of the states. If you see “…John Doe and Jane Doe, tenants by the entirety…” on a Washington deed, know that it means John and Jane are married to each other, but that it does not convey a right of survivorship. If you are involved in a property transaction and see this language on a deed or deed of trust, check to make sure it was not done erroneously. See RCW 11.04.071.
Creating and interpreting tenancies can be difficult and mistakes can have serious consequences. Contact an attorney experienced in Washington real estate matters if you have questions.
Disclaimer: This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.
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