July 13, 2012

Tenants in Common

Contractor's special real estate

When people purchase real estate jointly, they may hold title in a number of different ways. For example, they can hold title as (1) tenants in common, (2) joint tenants, (3) community property or (4) community property with right of survivorship. For (2), (3) and (4), it is not necessary to specify the ownership interest of each owner because it will be equal. 

Joint tenancy requires that ownership be equally allocated between the owners. CC § 683. For instance, if there are 4 owners, each owns 25% or if they are 8 owners, each owns 12.5%. Similarly, community property and community property with right of survivorship require equal ownership by each partner. Fam C § 2550. Hence, it would be redundant to list the ownership interests.

As for tenants in common, if there is no specification as to the ownership breakdown, a presumption arises that each owns an equal share. Caito v United Cal. Bank (1978) 20 C3d 694. For example, if A and B took title as tenants in common and the deed just said "A and B as tenants in common", the presumption would arise that A owns 50% and B owns 50% of the realty.   

The problem is that outside evidence can be used to prove, in case the percentages are not spelled out on the deed, that the tenancy in common does not have equal interests. Anderson v Broadwell (1931) 119 CA 150. Therefore, even if the deed did not list ownership interests, a separate document can be used to rebut the presumption of equal ownership. In light of this, it is best to just state that the interests are equal or just spell out the number, e.g. 50/50 or 25/25/25/25.