Although you may not realize it or at least give it too much thought, whenever you purchase real property (i.e., real estate) in New York, you have options as far as how the property is titled between the parties. Although not every option is available under every circumstance, it’s important to understand how you are accepting title to the property and how your rights will vary depending on which ownership model you assume.

So how exactly can real estate be titled between joint owners in New York? There are three basic models which can be followed: Tenancy by the Entirety; Tenants in Common; and Joint Tenants with Rights of Survivorship. Circumstances will dictate which is most appropriate for your particular situation, but the first step to picking is understanding the differences between them.

TENANTS IN COMMON

When individuals take property as tenants in common, the law recognizes that each party is assuming ownership of a certain stated percentage of the property as recited in the deed. If the parties fail to otherwise identify how property is meant to be owned, the law presumes that they have elected to own it as tenants in common. Tenants in common enjoy certain privileges, including living in the property rent free and possible entitlement to credits for things like taxes, maintenance and repairs.

Owning property as tenants in common has other unique and at times troublesome characteristics. When owned in this manner, each party has the right to transfer his or her own share during life without the permission of the other property owners. For obvious reasons, this may or may not be a desirable feature of owning as tenants in common. Similarly, tenants in common have the right to bequeath their respective interests to the property by will at death. If there is no will in place, the owner’s interest in the property will still nonetheless go to his heirs in accordance with New York’s intestacy laws.

Just like any other relationship, sometimes owners just can’t get along and want to part ways. When relations between owners grow acrimonious relative to their respective interests in the property and they want out but cannot agree on terms, they will be forced to undertake what’s known as an action for partition. This is basically an action where the respective rights of the parties are judicially determined with an eye toward severing their joint ownership of the property.

JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP

The second form of permissible real property ownership in New York is known as joint tenancy with rights of survivorship. This is a form of ownership wherein the parties are deemed co-owners of the property whose rights in the real estate automatically transfer to one another at the time of death. The deed must specifically provide language to the effect of “Bill Smith and Judy Doe, as joint tenants with rights of survivorship" to take advantage of this method. The benefit of owning property in this manner is that it allows for the automatic transfer if real estate from one owner to another while avoiding probate of that asset.

There are also some disadvantages to titling in this manner. By placing someone on title as a joint tenant, not only might you incur a gift tax liability, but you can never simply remove them from title if you wish to do so without their consent. Likewise, by allowing someone else title to the property, any creditors he or she might have could be able to attach a lien to the property relative to your co-tenants interest in same. While joint tenancy with rights of survivorship are nice in that they allow for an easy transfer of a significant asset, it must be recognized that certain issues might accompany that transfer.

TENANCY BY THE ENTIRETY

Last, owning property as tenants by the entirety is a form of ownership that is strictly limited to married couples under New York law. When property is owned in this fashion, the deed will contain language reflecting the parties’ relationship with verbiage to the effect of “Bill Smith and Judy Smith, as husband and wife." Where this language is missing, but the property is nonetheless obtained while the parties were married, there is a presumption that they intended to take it as tenants by the entirety. Couples do have the choice to opt out of owning property as tenants by the entirety, but in order to do so, they must state within the deed the other manner in which the wish to hold it.

Perhaps the most coveted feature of owning property as tenants by the entirety is that it allows each spouse to own 100 percent of the property, while simultaneously permitting the property to transfer from one spouse to the other at the time of death free and clear of any liens or encumbrances caused by the deceased spouse. Whether a good feature or bad (depending on perspective), owning property as tenants by the entirety prohibits one spouse from disinheriting the other relative to his or her interest in the property.