Joint Tenancy Vs. Tenancy In Common: Advantages & Disadvantages

Key Takeaways:

Joint tenancy has helped democratize homeownership in a competitive and expensive marketplace. Thanks to this increasingly popular form of concurrent real estate, more and more people can afford to buy homes that they would have otherwise been unable to. However, it is worth noting that the benefits can be extended to just about anyone, which begs the question: What is joint tenancy?

What Is Joint Tenancy?

Joint tenancy is a subcategory of concurrent real estate: a legal term used to describe co-ownership in a property or parcel of land. Therefore, as its name suggests, joint tenancy is a legally recognized arrangement between two or more parties to own a single real estate asset. Unlike other concurrent real estate strategies, however, this one requires each party to own the same amount of equitable interest in the subject property; regardless of how many parties want to own the property, it must be split evenly amongst everyone.

How Does Joint Tenancy work?

As a form of concurrent real estate, this strategy will resemble a conventional purchase. Instead of a single buyer, however, two or more parties will convene to make a legally binding agreement through a deed. Each party involved in the agreement will be listed on the deed following the purchase of the real estate asset. It is also important to note that each party must own the same amount of equitable interest in the home.

Joint tenancy implies each owner has equal rights; the deed says as much. As a result, each owner will share in subsequent obligations and benefits. On the one hand, each owner is responsible for paying their share of each expense: mortgage payments, property taxes, and maintenance. Failure to keep up with obligations will place the responsibility on the other owner(s). On the other hand, any benefits derived from ownership will be split evenly between each party. If, for example, the home is sold or rented out to tenants, each owner is entitled to the proceeds.

Since joint tenants is a legally binding contract, the agreement doesn’t leave owners with a lot of flexibility. In particular, anyone who wants to terminate the contract won’t be able to break the agreement without the consent of each owner. Even then, the property must be sold to distribute the proceeds evenly amongst each owner in the event someone wants out.

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Joint tenancy with right of survivorship

Pros & Cons Of Joint Tenancy

Not unlike every other type of concurrent real estate, joint tenants have become synonymous with several pros and cons. It is, therefore, of the utmost importance to weigh the impending pros and cons. To help with the decision, here’s a list of both the advantages and disadvantages.

Advantages Of Joint Tenancy

Let’s take a look at some of the advantages of joint tenancy:

  • Avoid Probate Court: Any agreement with a right of survivorship account will have already laid out how the asset will be distributed upon an owner’s untimely death. As a result, there’s no need to enlist the services of probate courts, which tend to cause more headaches than they are worth.

  • Democratizes Homeownership: By definition, joint tenancy is the result of multiple parties purchasing a single asset. Therefore, the more owners who agree to a contract, the less the initial investment will be. Consequently, more people will be able to avoid buying a home they would have otherwise had to pass on.

  • Equal Responsibility: Since there are multiple owners in a joint tenancy agreement, each party will share obligations like the mortgage, maintenance costs, property taxes, and anything else. With more owners, the costs incurred are less of a burden.

Disadvantages Of Joint Tenancy

Let’s take a look at some of the disadvantages of joint tenancy:

  • No Legacy: Agreements give all the rights to the surviving owners. In the event of a death of an owner, the asset will not be passed down to heirs but instead will be distributed to the remaining owners.

  • Lack Of Flexibility: Agreements are legally binding and hard to get out of. To break an agreement, owners must have the consent of each subsequent owner. Additionally, when one owner wants out, the property must be sold to distribute the proceeds evenly.

  • Equal Responsibility: While already mentioned as an advantage, equal responsibility is a double-edged sword. In a perfect world, each owner will carry their own weight. However, if one owner isn’t keeping up with their obligations, the responsibility will pass on to the subsequent owners.

What Is Joint Tenancy With Survivorship?

Joint tenancy with rights of survivorship (JTWROS) is exactly what many would assume: an arrangement between each owner which details how the assets will be distributed in the event of an untimely death. More specifically, joint tenancy with rights of survivorship will have each owner open a joint account that gives everyone on the account equal right to the account’s assets. The account will hold the deed to the property. If an owner passes away, the assets in the account will then be distributed to the remaining owners.

Avoiding Probate With Joint Tenancy

Joint tenancy with rights of survivorship supersedes the painfully complicated and time-consuming process that is probate court. In doing so, JTWROS automatically transfers ownership to a spouse or business partner in the event of an owner’s death. At the time of death, the JTWROS account holding the assets of the deceased will distribute the assets evenly amongst the remaining owners. As a result, there’s no need for probate courts to get involved. While probate courts are usually tasked with distributing the assets of deceased individuals, the legally binding agreement takes precedent. Simply put, there’s no need to rely on a probate court when a JTWROS account is already in place.

Joint Tenancy Vs. Tenancy In Common

At first glance, it would appear as if joint tenancy and tenancy in common are synonymous with one another. If for nothing else, both are concurrent real estate acquisition strategies that imply the ownership of a single real estate asset by two or more parties. Despite their similarities, however, some differences warrant a closer look.

While joint tenancy and tenancy in common both promote the ownership of a single property by multiple parties, the means to the end are different.  Each owner in a joint tenancy agreement must own the same amount of equitable interest in the subject property. If, for example, four parties enter into a joint tenancy agreement, each party must take a 25% stake in the asset (no more and no less).

Contrary to a joint tenancy agreement, a tenancy in common agreement does not require each owner to own the same amount of equitable interest in a subject property. If, for example, two people enter into a tenancy in common agreement, one may own the majority of the equitable interest; there’s no need for each party to own the same amount.

Therein lies the single greatest differentiation in the joint tenancy vs. tenancy in common debate: equitable interest. Since joint tenancy requires each owner to own the same amount of equitable interest, each owner must take the property title at the same time the deed is acquired. On the other hand, tenancy in common agreements may have a clear majority stakeholder, which allows for greater flexibility. Instead of needing each owner present when the deed is acquired, tenancy in common agreements can be created or amended at any time.

The flexibility awarded in a tenancy in common agreement also gives owners the ability to remove themselves from the deed without breaking the agreement. Since equitable interest isn’t required to be split evenly between each owner in a tenancy in common agreement, owners may remove themselves from the contract without penalty. Those who signed a joint tenancy agreement, on the other hand, will find that removing themselves requires a lot more work. In particular, removing a single owner will require the home to be sold so that the proceeds may be distributed evenly among owners.

It should be noted that each concurrent ownership strategy coincides with its own rules when an owner passes away. When a co-owner passes away in an agreement, the equitable interest may be passed on through the deceased owner’s estate. On the other hand, a joint tenancy agreement allows the equitable interest to pass to the surviving owner.

Benefits Of Tenancy In Common

In a market as expensive as today’s, the benefits of tenancy in common are obvious. Concurrent ownership strategies, in particular, make it possible for more people to actively participate in the housing market, which benefits the entire economy. In addition to helping democratize real estate, however, concurrent owners may enjoy the following benefits of tenancy in common:

  • Concurrent real estate acquisition strategies can help someone buy a home they would have otherwise been unable to.

  • Tenancy in common grants buyers a larger level of flexibility than joint tenancy.

  • The number of tenants living in a subject property can change depending on the needs of current or prospective owners.

  • Not every owner needs to acquire the same level of equitable interest in the property.

  • Each tenant can benefit from the appreciation of the subject property.

  • Tenancy in common agreements are able to be created or amended at anytime.


On the surface, joint tenancy is a legal agreement that enables multiple people to own equal shares of a real estate asset. Upon a closer look, however, joint tenancy is democratizing home ownership. Thanks to this particular concurrent real estate strategy, more and more people can own equitable interest in a real estate asset in an increasingly expensive marketplace. Owners can share in the benefits of homeownership without having to pay full price for an asset. Even investors can partake in the advantages of joint tenancy, which makes this an option worth exploring for many entrepreneurs.

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The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only.