Co-ownership is when two or more individuals share ownership interest of a piece of land or any other form of real estate. In Illinois, several laws and regulations are in place that require co-owners to mutually agree upon how the property title will be held by all parties involved. Generally, there are 3 ways a title can be held in co-ownership: tenants in common, tenancy by the entirety, and joint tenants with ownership rights.
Deciding the property title will determine the legal authorities and rights of outside creditors, as well as how it will be transferred in the event one or more owners pass away. It is important for co-owners to understand different ways of holding a title to make a well-grounded decision.
Tenants in Common
In co-ownerships, tenants in common is the default rule when no other specifications have been defined pertaining to property title and ownership. Tenants in common have independent ownership interests, allowing them to transfer, convey, or sell their share without the consent or permission of other co-owners. Similarly, creditors can make a claim on the property share of a particular property for settling debts.
With this rule, co-owners can set fractional interests and can obtain ownership at different times as well. However, defining varying amount of interests do not give the owner with a higher interest right to use the property than the others – this directive is called unity of possession. Moreover, no right of survivorship rule applies on tenants in common.
Tenancy by the Entirety
In Illinois, tenancy by the entirety means that a property title can only be held by married couples. This way of holding title allows couples to enjoy added protection against some creditors when it comes to marital property. Tenancy by the entirety also provides rights of survivorship when one spouse passes away. In some situations, the right of survivorship may prevent some provisions of a will from being enforced. An experienced real estate attorney can provide insights into benefits and drawbacks of this form of title to help you make the right decision.
When a property is owned under the joint tenancy directive, all co-owners acquire equal ownership interests. The terms and conditions of joint tenancy must be specified in the property deed. If one of the tenants sells or transfers their ownership interest, it will be considered a breach of the joint tenant agreement, as it will change the status to tenants in common. The agreement can also be broken if a partition action is filed or if one tenants buys the share of other tenants. With the help of a partition action, a beneficiary can sell the share.
Joint tenancy grants the rights of survivorship to other owners; meaning that if one of the owners passes away, their share is automatically transferred to surviving owners.
Joint ownership of a property involves taking care of a lot of legalities. It is best to work with an experienced real estate attorney who can guide you through the process of and help you and other owners pick the right way of holding a property title. Contact Casement P.C., to schedule a free consultation today.