Exploring Tenants in Common and Joint Tenancy
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.
Key takeaways
Key points
- Iowa co-owners usually hold title as tenants in common or as joint tenants with right of survivorship.
- Tenants in common can hold unequal shares, and a share passes by will or to heirs.
- Joint tenants hold equally, and the surviving owner takes the deceased owner's share.
- How the deed is written decides which kind of ownership you have, so it matters at the start.
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. A joint tenant can usually transfer their own share without the other owners' consent, but doing so generally ends survivorship for that share. To sell the whole property, all owners need to sign. 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 to sell the whole property in the future, all owners need to sign. 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.
What do people ask about owning property with someone else?
It depends on how you hold title. As a tenant in common, your share generally passes under your will or to your heirs. As a joint tenant with right of survivorship, your share generally passes to the surviving joint tenant, even if your will says otherwise. The deed wording is what decides.
A tenant in common can generally sell or transfer their own share without the other owners' consent. Joint tenancy works differently, and a transfer by one owner can end survivorship for that share. Buyers and lenders usually want every owner to sign. An attorney can explain how this applies to your property.
For deeds signed on or after January 1, 2015, a deed naming two people as married to each other is presumed to create a joint tenancy with survivorship unless it says otherwise (Iowa Code 557.15). Unmarried co-owners don't get that presumption. Clear wording in the deed avoids doubt.
The few words that set up survivorship or shares can decide who owns the property later. Mistakes may not show up until a death, divorce or sale, when they're harder to fix. Danilson Law prepares and records deeds in all 99 Iowa counties so the wording matches what you intend.
Have questions about your own property? Book a Discovery Call with Danilson Law, see our Iowa deed services, or call 515-512-5500. We work with clients in all 99 Iowa counties.
