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EVERYDAY LAW: Tenancy in common vs joint tenancy

Cecil McCarthy

EVERYDAY LAW: Tenancy in common vs joint tenancy

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“What is the distinction between a joint tenancy and a tenancy in common? Is there an advantage of having property conveyed in either way?”
The above questions were posed in an email I received a few weeks ago. I have addressed the issue of co-ownership in this column previously. It is therefore a subject that I am revisiting.
Where land is conveyed or devised to two or more persons, without words to show that each person is to take a separate share, they hold the property as joint tenants. In modern conveyances it is more common to indicate in the conveyance that the purchasers hold the property as “joint tenants”.  
On the other hand, where land is conveyed or devised to two or more persons with words that indicate that each person is to take a separate share, then they hold the property as tenants in common (for example, if the conveyance reads: “in equal shares” or “one-third share” or any similar words showing the shares of the parties). In modern conveyances it is usual to indicate that the parties hold the property as “tenants in common” where they hold separate shares.
When parties hold property as joint tenants the parties are entitled to the entire property. There are no separate “shares”. It is regarded as a single ownership. No party can claim any part of the property as his or hers.
The most significant incident of the joint tenancy is the right of survivorship. The effect of this principle is that, provided there is no severance, if one tenant dies while the joint tenancy is subsisting, his share automatically vests in the surviving joint tenants or tenant as the case may be.
Where there is a tenancy in common each tenant holds a distinct share in the property (that is, one-quarter, one-third, one-half and so on), however, the shares are undivided.
What this means is that while each tenant has a distinct share, the property is treated as a single title. No one tenant can therefore unilaterally determine which one-third or one-half or other proportion of the property is his. However, if the property were sold, each tenant would be entitled to the proportion of the purchase money consistent with his share of the property.
On the death of a tenant in common, his share passes in accordance with the provisions of his will or, if no will has been made, in accordance with the intestacy provisions of the Succession Act.    
In practical terms, it seems to me that the advantage of a joint tenancy is that there are no costs associated with a transfer on death. Also, because there is a single ownership, mortgagees tend to prefer joint tenants. It is in my view suited primarily to couples and persons who have close family ties and who may have no difficulty if the property goes to the surviving tenant.
A tenancy in common is preferable where the parties are making an investment and therefore would like a return commensurate with their investment.
It is also useful where a party wishes to retain control of his share in the joint property in order to have the capacity to vest it in another person by will or otherwise.
By “severance of a joint tenancy”, one means that the parties no longer hold a single title but they now have a distinct identifiable share of the property even though it is undivided.
There are several ways in which a joint tenancy may be severed. However, it is common to sever using one method – that is, by written notice in accordance with section 43 of the Property Act.
Written notice may be unilateral and it is not essential that the notice must have come to the attention of the other joint tenant. One significant point to note is that the commencement of legal proceedings can constitute written notice. This has been so held in English as well as Barbadian cases.
Apart from written notice there are three other situations in which at common law severance may be achieved: These are by:
1. an act (of a joint tenant) operating on his own share.
2. mutual agreement.
3. mutual conduct.
An example of 1 above arose in one case in which a husband during his lifetime executed a conveyance of his share in favour of another person by deed of gift. In that case it was held that the deed of gift had the effect of severing the joint tenancy.