Tenancy in common vs joint tenancy vs tenancy by the entirety: how co-ownership works in New Jersey

The three forms of co-ownership side by side

When two or more people own the same property at the same time, the deed decides how they hold it. Three forms show up on the exam. They differ on four questions: who can own this way, whether shares can be unequal, whether one owner can sell without the others, and what happens when an owner dies. Learn the table below and most questions in this area answer themselves.

PSI's national outline lists "Implications of ownership as tenants in common" and "Implications of ownership in joint tenancy" under Types of ownership, in the Property ownership section, which is 10 percent of the national portion. Tenancy by the entirety is not named in the outline, but it is the third leg of the comparison every prelicensing course teaches, and in New Jersey it is the default for a married couple named as spouses on a deed. The property ownership study guide covers the rest of that section, from severalty to condos and co-ops.

The four unities: PTTI

Textbooks test joint tenancy through the four unities. The memory aid is PTTI, or "PITT" if you prefer to remember a city. Each unity is a box the owners have to tick together:

• Possession: every owner has the right to use and possess the whole property, not a marked-off piece of it. This is the only unity a tenancy in common needs.
• Time: all owners acquire their interests at the same moment.
• Title: all owners take their interests through the same deed or will.
• Interest: all owners hold equal shares of the same kind of estate. Three joint tenants each own one third; nobody can own 60 percent.

Tenancy by the entirety adds a fifth unity, unity of person, because the law treats the married couple as a single owner. If an exam question describes co-owners who bought at different times, through different deeds or in unequal shares, they cannot be joint tenants. Whatever the deed hoped for, the general rule is that they are tenants in common.

Tenancy in common: separate shares, no survivorship

Tenants in common each own an undivided share. Undivided means nobody owns a particular room or acre; everyone has the right to use the whole property. The shares do not have to be equal. Two siblings can own 70 and 30 percent, and both can still use the whole house.

Each tenant in common can sell, mortgage or give away their own share without asking the others. The buyer simply steps in as a new tenant in common. At death, the share passes under the owner's will or, without a will, to their heirs. It does not go to the other co-owners just because they are co-owners.

New Jersey makes tenancy in common the default. N.J.S.A. 46:3-17 says no estate is a joint tenancy unless the grant or devise expressly sets out that the parties intended a joint tenancy "and not an estate of tenancy in common." So a deed to "Lena Ortiz and Sam Park," two friends, with nothing more, makes them tenants in common in New Jersey.

Joint tenancy and the right of survivorship

A joint tenancy is the form with survivorship. When a joint tenant dies, their interest does not pass through their estate. It simply ends, and the surviving joint tenants own the whole. When only one joint tenant is left, that person owns the property in severalty, meaning alone.

Because of N.J.S.A. 46:3-17, a New Jersey deed has to say it plainly. Typical wording names the grantees "as joint tenants with right of survivorship and not as tenants in common." In our view, anything vaguer, such as a bare "jointly," is a question for the closing attorney, not for you as a licensee. New Jersey also lets an owner convey to themselves and another person as joint tenants directly. N.J.S.A. 46:3-17.1 treats that deed as valid, as if the owner had first deeded the property to a third party who then deeded it back to all of them.

How a joint tenancy is severed

Severance is the textbook word for breaking the joint tenancy. The general rule: a joint tenant can sell or give away their own interest without the others' consent, but the buyer cannot step into the joint tenancy, because the buyer did not take title at the same time or through the same deed. The buyer becomes a tenant in common. The remaining joint tenants stay joint tenants with each other.

Work these slowly on the exam. Draw the owners in a row, cross out the one who sold, mark the newcomer as a tenant in common, and only then apply survivorship among the people still in the joint tenancy.

Tenancy by the entirety in New Jersey

Tenancy by the entirety is a form of joint ownership with survivorship that only a married couple can hold. New Jersey sets out the rules in statute:

• Creation, N.J.S.A. 46:3-17.2: a tenancy by the entirety is created when a married couple takes title to real or personal property under a written instrument "designating both of their names as husband and wife," when they lease property under a written instrument with an option to purchase that names them the same way, or when an owner spouse conveys to the other spouse and themselves jointly under such an instrument. Wording such as "John Doe and Mary Doe, his wife" or "Mary Doe and John Doe, her husband" is deemed to create one.
• Presumption, N.J.S.A. 46:3-17.3: an instrument creating a property interest for a husband and wife is not read as a tenancy in common or a joint tenancy unless it expressly says so or that intent is clear from the instrument as a whole. This is the reverse of the default for everyone else.
• No going it alone, N.J.S.A. 46:3-17.4: neither spouse may sever, alienate or otherwise affect their interest, during the marriage or upon separation, without the written consent of both spouses.
• Survivorship, N.J.S.A. 46:3-17.5: when either spouse dies, the surviving spouse is deemed to have owned the whole of all rights under the original instrument from its inception.

These sections come from a law enacted in 1987 that took effect in 1988, and it applies to tenancies created on or after its effective date; older tenancies by the entirety follow earlier case law, a point the Appellate Division noted in Jimenez v. Jimenez (2018). The creation and presumption sections are written in terms of "husband and wife," while the consent and survivorship sections say "spouse." Same-sex married couples are married couples: the U.S. Supreme Court held in Obergefell v. Hodges (2015) that states may not exclude same-sex couples from civil marriage "on the same terms and conditions as opposite-sex couples," so for exam purposes treat any married couple as eligible. Exact deed wording for a particular couple is a question for the closing attorney. Civil union partners are covered by a separate law: N.J.S.A. 37:1-32 lists "eligibility to hold real and personal property as tenants by the entirety" among the spousal rights that apply in like manner to civil union couples. Registered domestic partners are different. We found nothing in the Domestic Partnership Act that gives them tenancy by the entirety. Domestic partners who want survivorship can take title as joint tenants with the express wording 46:3-17 requires.

The textbook rule is that divorce ends a tenancy by the entirety and the former spouses usually become tenants in common. Treat that as the general rule only. In New Jersey, the divorce court can make an equitable distribution of marital property, including ordering a sale, so who ends up with the house is decided case by case, and any real situation is a question for the parties' attorneys.

Partition: when co-owners cannot agree

Partition is the court process co-owners use to end their co-ownership. The general rule: any tenant in common or joint tenant can ask a court to divide the property. If it can be split fairly, the court divides it physically. If not, the court orders a sale and divides the money according to the owners' shares. A single house often ends in a sale, because it cannot be split fairly.

New Jersey's statute, N.J.S.A. 2A:56-2, lets the Superior Court order a sale in a partition action when it appears that a partition "cannot be made without great prejudice to the owners, or persons interested therein." Tenants by the entirety are a different case. N.J.S.A. 46:3-17.4 stops either spouse from severing alone during the marriage, and the Appellate Division in Jimenez read it to bar the partition and forced sale of entireties property.

Is New Jersey a community property state?

No. The exam may mention community property, the system some states use in which most property acquired during a marriage belongs to both spouses equally. New Jersey instead uses equitable distribution on divorce. N.J.S.A. 2A:34-23 lets the court make an equitable distribution of property, real and personal, acquired during the marriage or civil union, with property received by gift or inheritance generally excluded. Equitable means fair as the court sees it, not automatically 50/50. For a married couple's title during the marriage, the rule that matters here is tenancy by the entirety.

Exam scenarios to practice

Every one of these is a vesting question, and vesting is settled by the deed, which is why the transfer of title guide is the natural next read. To see which of these traps you still miss under time pressure, run a full practice exam, and look up any unfamiliar term in the glossary.

One professional note, which is ours: how buyers take title has tax, estate and other legal consequences. Licensees in New Jersey explain the concepts but should send the actual choice to the buyer's attorney.