How Can You Co-Own a Property in New York?

There are many reasons to purchase property in New York with a co-owner. When it comes to residential property, the most common motive for joint ownership is marriage, but this is hardly the only time joint or co-ownership is desired.

Friends, family members, and investment partners have all decided to own Long Island property under a form of joint ownership. Yet, few people actually understand property co-ownership in New York and the unique issues of selling, transferring, or otherwise disposing of jointly owned property.

Tenancy by the Entirety

There are three distinct ways to jointly own property in the State of New York. By far the most used of these three is called tenancy by the entirety. Tenancy by the entirety is so common in New York because it’s the default way that married couples own real property. In fact, only married couples can own property in this capacity.

When you work with a residential real estate attorney in New York to purchase property, your deed at closing will state that you are married, which signifies that the property is owned as tenants in the entirety. But if it doesn’t explicitly say this, the property is automatically owned in this capacity, unless another form of ownership is specified on the deed.

Tenants in Common

Another way to jointly own property is as tenants in common. Tenancy in common is based on percentage ownership of the same property. For example, Janet owns 20% of the property, Michael owns 50% of the property, and Sophie owns the other 30%. If two or more names are listed on a deed, but the individuals aren’t married then New York law assumes that the property is co-owned by tenants in common.

Joint Tenants with Right of Survivorship

Lastly, people can jointly own property as joint tenants with right of survivorship. To co-own property this way, it must be explicitly and correctly stated in the deed. This specific requirement makes join tenants with right of survivorship the least common way to co-own property in New York. The biggest difference between joint tenancy and co-owning property as tenants in common is what happens when one owner dies. In some situations, joint tenancy is preferable because property ownership can pass outside probate, but this isn’t always the case.

Selling Co-Owned Property & Other Transfers

The biggest questions for co-owners of New York property arise when trying to sell the property or upon the death of one owner. The process and necessary procedures to successfully transfer co-owned property are unique to the form of joint ownership.

First, what is needed to transfer property owned as tenants by the entirety? Under this form of ownership, both people have 100% ownership of the property. Therefore, the property can only be gifted or sold with the approval of both spouses. One signature is insufficient. Yet, if one spouse passes away this is the best form of ownership because the property will automatically pass to the other spouse, free and clear of any liens attributed to the deceased spouse.

Second, how can tenants in common transfer property? As tenants in common, Long Islanders only own their specified percentage. A property owner is able to transfer his or her percentage without the approval of the other tenants in common. As well, upon the death of one tenant in common, his or her interest in the property passes according to a will or to the person’s heirs.

For some property co-owners the ability to easily separate ownership rights as tenants in common is highly desirable, but it can also create issues if one co-owner dies unexpectedly or sells interest in the property unbeknownst to the other tenants in common.

Finally, joint tenancy with right of survivorship is similar in transfer to that of the rights and obligations under a tenancy in the entirety. If one joint tenant dies his or her interest will automatically transfer to the other property owner(s), but also this form of ownership requires joint approval for any other sale or transfer.

Structuring Your Property Co-ownership

Are you purchasing property a co-owner, but uncertain how to structure the ownership rights and arrangement? You can speak with Long Island real estate attorney, Sami Perez, about joint ownership and any of New York’s property ownership interest. To speak directly with a property attorney call (516)-216-5060.

The information in this blog post (“Post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this Post should be construed as legal advice from The Law Office of Samilde Perez or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter.