Iowa Co-tenancy property ownership refers to the legal relationship when two or more residents own the same property. Also referred to as vesting, co-tenancy carries with it several options for determining the percentage of a property one of the co-tenants owns, as well as what happens to the property in case one of the co-tenants dies. In Iowa, Tenants in Common and Joint Tenancy with Full Rights of Survivorship are the two forms of co-tenancy relationships.
Although the two legal forms of dual tenancy ownership have similar characteristics, there are some important distinctions that determine the percentage of a property owned by each of the residents of the property. In addition, a major difference between a Tenants in Common and Tenants with Rights of Survivorship relationship is how the State of Iowa decides what happens to a property when one of the co-owners passes away.
Tenants in Common
Two or more owners can own equal or unequal shares in a Tenants in Common property ownership arrangement. Whether the shares held are equal or unequal in terms of financial leverage, the total shares must equal 100 percent. Tenants in Common ownership contracts establish that one owner’s shares are separate from the shares held by a second owner in a property. This means one owner has the legal right to transfer his or her shares to another owner, without having to gain consent from the other owners of the property. If an owner dies, the shares held by the owner transfer to the person stated in his or her will. Otherwise, the surviving heirs receive the property ownership shares.
Joint Tenancy with Full Rights of Survivorship
In a Joint Tenancy with Full Rights of Survivorship property ownership agreement, each party owns an equal share of the property. This is a common property ownership arrangement for married couples. If one of the two parties wants to transfer ownership of a property, he or she must gain the consent of the other party to the property ownership contract. The transfer of property share ownership requires the second owner to sign the deed. When one of the owners dies, the rights of survivorship automatically transfer his or her share to the surviving owner (joint tenant). The right of survivorship takes legal precedence over any language written into a will or an inheritance document.
The Bottom Line on Iowa Co-Tenancy
When the time comes to purchase a property with your spouse, parents, or possibly siblings, you have to decide how you want to title the property. If you opt for Joint Tenancy with Full Rights of Survivorship vesting, be aware that you must gain the consent of ALL joint tenants to sell the property in the future. The primary benefit of joint tenancy is the automatic transfer of the property to the surviving joint tenants upon the death of another joint tenant (in case of a married couple, the property passes to the wife upon the passing of her husband).
However, if you choose to move forward with as Tenants in Common, each separate owner (tenant in common) may sell their “undivided partial interest” as they wish, without the other owner’s consent. It is more common to see this method of ownership used when passing partial interests of property to multiple heirs through probating of a will.
According to Iowa Code Chapter 557, which governs property ownership and conveyance, it is crucial to consult with a licensed Iowa real estate attorney to ensure compliance and a thorough understanding of co-tenancy property ownership rights and obligations.
