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Careful Planning is Required in Acquiring Title to Real Property Where There Are Multiple Owners

02.09.2016 by Law Firm of Seglund Gabe Pawlak & Groth in Real Estate Law

In Michigan, where there is more than one owner, title to real property can be held in several different ways. These include tenancy in common, joint tenancy, joint tenancy with full rights of survivorship and tenancy by the entireties.  Your rights and obligations will vary depending on how you take title.

Tenants in Common. Tenancy in common is the preferred and presumed form of ownership of Michigan real estate involving more than one owner.  Tenants in common each hold what has been described as an undivided share in the real estate, usually stated in percentage form.  Each tenant in common is entitled to enter every part of the land and to occupy and enjoy the whole property.  If a dispute arises between the co-tenants that cannot be resolved by agreement, a tenant in common may file suit to have the land partitioned.  Significantly, tenants in common do not enjoy a right of survivorship, so the interest of a deceased tenant in common passes to his or her heirs.

Joint Tenants. A joint tenancy is created by an express declaration in the deed, such as to two or more persons “as joint tenants” or “as joint tenants and not as tenants in common.”  Joint tenants enjoy rights of survivorship. So if one joint tenant dies, all remaining joint tenants succeed to his or her share in equal proportions.  All joint tenants hold an equal, undivided share in the property.  Unlike the situation where property is held as tenants in common, the death of a joint tenant does not result in his or her heirs obtaining any interest in the property.  A joint tenancy may be severed where one of two joint tenants conveys his or her interest to a third party.  The result is that the former joint tenant and third party are now tenants in common.

Joint Tenants with Full Rights of Survivorship. A joint tenancy with full rights of survivorship is created by a deed to two or more persons not married to each other by using language such as “as joint tenants with full right of survivorship”, “as joint tenants and to the survivor”, or something similar.  A joint tenancy with full rights of survivorship is similar to a joint tenancy in all respects except that the right of survivorship cannot be severed by a conveyance to a third party.  Survivorship can only be destroyed by agreement of all parties. If a dispute arises between the co-tenants that cannot be resolved by unanimous agreement, generally speaking, no partition action is available to resolve that dispute.  A limited remedy is available in certain circumstances, but that topic is beyond the scope of this article.  Upon the death of all but the last surviving joint tenant, title vests in the last surviving joint tenant.

Tenancy by the Entireties. A tenancy by the entireties is a form of concurrent ownership that is created by a conveyance to a husband and wife.   A conveyance to a husband and wife is presumed to create a tenancy by the entireties.  A joint tenancy or tenancy in common may be created between spouses, but the language used must be clear.  Phrases like “as joint tenants and not as tenants by the entireties” or “as tenants in common and not as tenants by the entireties” must be used.  Neither spouse can dispose of any interest in the property without the agreement of the other spouse.  Upon one spouse’s death, the property belongs to the surviving spouse.  A conveyance to two unmarried persons “as tenants by the entireties” does not create a “tenancy by the entireties”, even if they subsequently marry.  A court will declare them to be tenants in common or joint tenants, depending on the facts of the case.

In Michigan, there are several ways in which title to real property can be held by multiple persons. Make sure that you choose the correct form to avoid unpleasant results.  Consult an experienced real estate attorney who can prepare a deed that best suits your needs.

Michigan Legal Solutions

At Seglund Gabe Pawlak Groth & Kelley, PLC, our real estate attorneys are qualified to represent both the buyers and the sellers in residential and commercial real estate transactions. They have experience in real estate finance and have represented the interests of both borrowers and lenders. Our attorneys also represent landlords and tenants in negotiating and drafting lease documents. Our attorneys can prepare and review all of the documents that are necessary for a real estate transaction to ensure that everything has been drafted properly to protect your interests. In addition, our attorneys are experienced in litigation involving all aspects of the purchase, sale or lease of real property, both at the trial and appellate levels.

Michigan Legal Solutions
28345 Beck Road, Suite 401
Wixom, MI 48393
Phone: (248) 869-0030
Fax: (248) 869-0039
***The information provided in this article is for informational purposes only and is not legal advice. If you have a question about how real estate should be owned, consult an attorney who is well-versed in this topic.

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