Definition of a Joint Tenancy Agreement

Joint tenancy agreements represent a specific, legally binding property ownership arrangement in Australia designed to offer enhanced security to all parties involved. It’s a system typically implemented between partners, spouses or family members to avoid the stress of going through probate in the event of an owner passing away, as the property automatically, by law, transfers to the other party in such an event. The simplest way of describing a joint tenancy relationship is that between partners in a marriage, however, they are not exclusive to this scenario – joint tenancy agreements exist between a variety of different family members, friends or close acquaintances.
The difference between a joint tenancy relationship and that of a typical property purchase is the idea of a ‘right of survivorship’. In other words, the deal operates under the caveat that one party has the right to take ownership of the asset should another party pass away . A joint tenancy agreement also attributes equal power in the purchase of the property. This means that if the partners in the agreement split in the future, ownership of the property in question will be split down the middle, leaving the property to be divided equally. By contrast, partition agreements allow for separate and partial shares of a property to be owned by a particular party.
In contrast to a joint tenancy agreement, tenants-in-common are parties who share ownership of a property, but have no right of survivorship. In this arrangement, each party in the agreement has a distinct share of the purchased property, which can be decided from the outset via a percentage split by each party. Because there is no survivorship right attached to a tenants-in-common agreement, an individual share can be sold to a local third party if a tenant experiences financial hardship or sickness.

Key Properties of Joint Tenancy

The key features of a joint tenancy are the right of survivorship, equal ownership interests, and the inability to transfer an interest out of the joint tenancy unilaterally. The joint tenants own the property equally and, upon the death of a joint tenant, that joint tenant’s share passes to the remaining joint tenant(s) under the right of survivorship.
If two people own real estate as joint tenants, on the death of one of the owners, the surviving owner is presumed to succeed to 100% of the ownership of the property. The estate of the deceased owner is not entitled to any economic value of the property because of the existence of the right of survivorship.
A joint tenancy must involve the same language to create the joint estate, with the intent of acquiring the joint estate shown by the four unities: unity of title, unity of time, unity of interest and unity of possession.
To create a joint tenancy by deed, there must be a conveyance of the property to the joint tenants. The deed must clearly refer to the joint tenants as joint tenants under the right of survivorship. The grantor must intend to convey an equal share to the joint tenants immediately prior to their death. If the property is owned equally by the grantors under the right of survivorship, then a conveyance of the property to the joint tenants will create the joint tenancy. A deed conditioning the joint tenants’ ownership on them surviving each other is void. The grantor’s intention must be clear. The deed’s terms must clearly establish that the joint tenancy is intended.
If the property is owned by one person only, that owner can add another person as a joint tenant any time by deed. There is no necessity for the grantee to make a contribution to the purchase price or otherwise contribute to the equity in the property.
Joint tenancy is also created automatically when properties are conveyed in joint and successive deeds: "to A and B, their heirs and assigns, for the joint lives of A and B, and at the death of A and B, to C and D, their heirs and assigns", the joint life tenancy, to begin at the death of the first of A and B, is a life estate vested in C and D as remaindermen and the issue of A or B take nothing. A joint tenancy is presumed in a conveyance to a husband and wife.
As previously noted, the uniqueness of a joint tenancy is in the right of survivorship built into the ownership of real property. Another unique feature of a joint tenancy is that there can be no division of the property for sale or partition of land without the consent of all of the joint tenants. This inability to divide the property creates a problem for a surviving joint tenant in his or her desire to obtain 100% ownership of the property. To do so, the deceased owner’s interest must be eliminated from the property title.
An example of this occurring is something commonly understood; however, in the absence of authority, rarely attempted. Reread the last sentence and think of the obvious easy way to remove residue. In practice, it should be emphasized past the point of monotony that eliminating the deceased owner’s share from property title for a survivor of a joint tenancy will have no effect because the right of survivorship will automatically pass the deceased owner’s interest to the surviving owner.
The only way to terminate a joint tenancy is by destroying it, which is accomplished by agreement, by involuntary partitioning, such as a forced sale or through voluntary partitioning. Voluntary partitioning involves transferring the jointly owned property to one joint tenant who gives consideration to the other joint tenant equal to that missing half of the joint tenancy property.
If a joint tenancy is severed, the credit of a right of survivorship is lost, and the joint tenancy terminates. Division of property may occur and will occur as to the parties’ ownership of the property. However, the joint tenancies or unities, as explained above, must be preserved in the remaining ownership interest of the parties, if any ownership is to remain.
For example, if ownership is converted to a tenancy in common, the parties can no longer take or convey together. Nor can a party take part in a lawsuit for or against the other without the consent of the remaining party. The remaining ownership interest of the parties must be held in such a way that those four unities are preserved.

Benefits and Drawbacks

Aside from the above rule of survivorship, one of the main advantages of a joint tenancy arrangement is that it helps simplify what happens to your property after death. When one owner dies, their interest in the property automatically goes to the other owners who are left. So the primary advantage of a joint tenancy, and a consideration that certainly makes it appealing to many, is that a joint tenancy does not require probate in order to pass title to the surviving joint tenant(s).
However, there can be significant downsides to a joint tenancy arrangement, particularly as it pertains to the joint owners’ rights and obligations amongst themselves.
Joint owners of real property may find themselves in a sticky situation in the event that one joint tenant wants to sell their interest in the property, but the others do not. For example, if a married couple jointly owns their home, and one spouse wants to obtain a divorce and receive their share of the equity in the home, the other spouse may be willing to pay a buyout amount but may be unwilling or unable to continue the mortgage payments on the home alone. A solution in this scenario might be to sell the home, split the proceeds of the sale, and find new places to live. However, without the signature of all joint tenants, who are all bound to the property, the sale of the property cannot proceed. This can often leave the parties with an unpalatable choice of either not selling the property, or selling the property but being forced to divide up the profits.
The problem can also play out over two or more related properties. Consider the situation where a married couple owns three rental properties, and the husband wants to sell his share of two of those properties, but the wife is unwilling to sell. Even though her husband is free to sell his interest in the third property by itself, he may not want to go through the trouble of being a partial landowner in another property. Likewise, her unwillingness to allow the sale of the properties may continue to bind him to an unwanted business relationship with her.
What happens when there is a dispute about who owes what on property that is owned jointly? A common scenario hinges on a decision made by one spouse to renovate the marital residence that is owned jointly, which may substantially increase the value of the property. Any substantial increase in the value of the property, as opposed to a routine maintenance issue, can be a major point of contention between the parties going forward. Will the spouse who made the decision to renovate get the entire increase in value at the time of distribution of property in a divorce? Should they only get credit for half of the increased value, given that they are only one of two owners on the property? Or should the increase in value be balanced out by a reduction in value due to the other spouse’s decision to spend a large amount of money to add an extension to the property? These types of issues can turn a $5,000 renovation into a $50,000 legal fight.
If one spouse in a marriage jointly owns a property at the time of the marriage, the increase in value of that property during the marriage is a marital asset subject to equitable division. However, a significant improvement to that property, such as an addition, may not be subject to division if the other spouse cannot point to an actual contribution to the cost of the addition. This creates yet another potential headache when you own property jointly, but have different ideas about how to improve the property.

Example Format of a Joint Tenancy

While a joint tenancy agreement is a simple document, there cannot be any ambiguity with its details. The following is a sample format for a joint tenancy agreement.
AGREEMENT FOR JOINT TENANCY (IN RESPECT OF THE PROPERTY SET OUT IN SCHEDULE "A")

1.

(Name) of ………………………..of ……………………………………………………………………("the former Tenant")
(Buyers name) of ………………………………………………………………………………………………..("divorced wife")
(Buyers name) of ……………………………………………………………………………………….. (the divorcer husband)
(the’Applicants") Do hereby apply hereby undertake to lease from the Landlord, 1 & 2, Whose address is set out in Schedule "A" at a rental of Ringgit one thousand five hundred (RM1,500.00) per calendar monthThe property as set out in the Schedule "a" hereto

2.

The parties agree and acknowledge that the tenants shall pay all utilities and assessment rates arising from the Property during the period of the tenancy.

3.

The terms of this tenancy shall be twelve (12) months from the date hereof.

4.

The terms and conditions of the tenancy herein shall be those contained in the First Schedule hereto.

5.

The parties hereto hereby agree that this tenancy shall be subject to the provisions of section 142 of the Act as follows:
(a) the landlord may not, except on the grounds set out in the Second Schedule hereto, recover possession of the property;
(b) the landlord may not recover possession of the property unless he or she is able to show that he has complied with subsection (3) or (4) of section 77 or section 136 of the Landlord and Tenant Ordinance in any proceedings for the recovery of possession of the property.

6.

Section 2 of the Landlord and Tenancy (Control of Rents) Ordinance, Cap 122 does not apply to the tenancy herein and the rent chargeable shall not be subject to any regulations made thereunder.

7. This tenancy shall otherwise be terminated by the provisions of Section 131 of Act 136/69
8.

Any notice which must or may be given under this tenancy may be sufficiently given by sending it through the post, addressed to the party upon whom it is to be served at his or her address appearing herein.

9. The parties hereto hereby accept full personal liability for this tenancy agreement.

Dated at ………………………. …………………… this ………………. day of ………………………………
Signed and delivered by the said…………………………… in the presence of ………………………………
Signed by the said ………………………. in the presence of ………………………………
This Agreement shall be subject to the laws of Malaysia.

Requirements and Precautions

The legal requirements and considerations when entering into a joint tenancy agreement can vary depending on the specific state in which the parties reside. In general, however, there are a number of common elements that must be understood when entering into this type of tenancy arrangement.
First and foremost, when creating a joint tenancy agreement, there must always be four unities present: unity of interest, unity of title, unity of time and unity of possession. In most circumstances, individuals entering into a joint tenancy relationship will share the same financial interest in the property in question (unity of interest); they will have acquired the property in question through the same contract (title), within the same timeframe (time) and they will generally be residing on the property together (possession).
Also, it is important to note that a joint tenancy agreement must always contain language explicitly supporting the parties’ wishes to enter into such an arrangement. If the language present in a deed or other legal document does not specifically state that the parties wish to share rights to the property in question as joint tenants, then the property will instead be considered a tenant in common relationship .
Finally, all joint tenancy agreements allow each party to the arrangement to make decisions about and undertake transactions with the property in question without requiring the signature or consent of the other parties. This means, for example, that any one party can sell the property in question, make alterations to the property, etc., without requiring the approval of another individual.
As an example, a couple in Georgia decides to purchase a home. In order to do so, they will often enter into a joint tenancy agreement that allows them to have equal rights to the property. In Georgia, only the first two of the "four unities" (interest, title, time and possession) must be present for a joint tenancy agreement to be valid.
As such, we can see that while there are certainly some common factors that tend to be present in joint tenancy arrangements no matter the state, the state-specific laws and regulations surrounding these agreements will still vary. Of course, if you need help understanding how these considerations may affect you in your specific situation, it’s always a good idea to speak with a qualified real estate attorney.

How to Prepare a Joint Tenancy

In order to set up a joint tenancy agreement, a property must be owned by two or more owners. When the joint tenancy is created, each party signs a deed. It’s recommended to consult with a legal professional when drawing up the deed or any other legal paperwork related to the creation of the joint tenancy. It’s also best to consult one of our certified financial planners to understand how a joint tenancy will affect your financial situation.
Preparation of Documents
If the property was purchased as part of a joint tenancy agreement, the contract stipulates this detail on the deed. When a joint tenancy agreement is being established after the property has been purchased, the deed must be prepared to include all parties involved in the agreement. The deed also must include specifics on how the property will be managed and the process if one party wants to sell their share. When the deed is ready, it should be filed with local maintenance and tax offices. A sticker will then be issued to show that the deed has been filed with the office or offices.
Signing the Deed
When signing the agreement, all parties will be required to sign the deed together to finalize the contract. It’s recommended to do this in front of a notary public. All parties should receive a copy of the deed once it’s been executed and accepted. The joint tenancy agreement can be amended at any time if all parties involved agree to the changes. Each time the deed is amended, it must be signed by all parties again and presented to the clerk’s office.

Ending a Joint Tenancy

Terminating a joint tenancy agreement can be as simple as an accidental act or as complicated as a court proceeding, depending on the reasons for the break. Any action taken by one joint tenant must be legally permitted under PSLRA and/or the lease agreement and with the remaining joint tenant’s consent. These actions can include:
• Changing locks
• Giving notice of termination actions taken by one joint tenant before the other has consented to them
• Evicting tenants
• Changing tenant arrangements
• Taking new tenants in
If all is well between the joint tenants, they can agree to terminate the joint tenancy though a release of some kind. This still needs to be agreed upon by both parties in writing and, usually, before a notary public or other legally permitted authority. The determined outcome would be a deed of surrender signed by both joint tenants. If the joint tenants refuse to ratify or perform termination, or if there are disputes between the joint tenants or others affected by the tenancy, the procedure for terminating the tenancy becomes more complex. The most common remedy in Australia is to apply to the courts for relief of tenancy . This means the intent of lease termination must be submitted for judgment, which is when the details of the lease agreement will be reviewed to determine if the process for termination was duly enacted. Both the lessee and appointors need to be served correctly with applications to call them to court. The court can then determine whether the tenancy should be terminated or judged that costs were to be paid pursuant to the tenancy agreement. For those using a rent assistance bond under 18 (2) of the Residential Tenancies Act of 1997, there is a prescribed notice of hearing that must be submitted to the magistrates court registrar in order to establish a hearing time and date and receive a notice for the outcome. The tenant is then served this notice which tells them to appear before the court on the matter. Singapore also has a similar remedy (see Land Titles (Strata) Act) in their condo law. In the Land Titles Act strata, rules that are established can be set aside by order of the court, subject to the terms of the application and agreement of the tenants. Where by consensus, a remedy for entry of purchase price can be established.