Question

Describe the difference between the ownership types below. Then explain when you would use each one AND why Joint Tenancy Ownership Tenancy in Common Ownership Partnership Ownership

Answer 1

Answer:-

Difference between Tenancy in Common and Joint Tenancy

When two or more people own a home, either as a joint tenancy or tenancy in common, each individual owns a share (or interest) of the entire property. This means that specific areas of the house are not owned by any one individual, but instead, are shared as a whole. While joint tenants are similar to tenants in common in many ways, particularly with regard to their right of possession to a given property, there are some important differences

Tenancy in Common

While none of the owners may claim a specific area of the property, tenants in common may have different ownership interests. For instance, Tenant A and Tenant B may each own 25 percent of the home, while Tenant C owns 50 percent. Tenancies in common also may be obtained at different times; so an individual may obtain an interest in the property years after one or more other individuals have entered into a tenancy in common ownership.

Joint Tenancy

Joint tenants, on the other hand, must obtain equal shares of the property with the same deed, at the same time. The terms of either a joint tenancy or tenancy in common are spelled out in the deed, title, or other legally binding property ownership document. The default ownership characterization for married couples is joint tenancy in some states, and tenancy in common in others

A joint tenancy can be broken if one of the tenants transfers or sells his or her interest to another person, thus changing the ownership arrangement to a tenancy in common for all parties. However, a tenancy in common can be broken if one or more co-tenants buy out the others; if the property is sold and the proceeds distributed amongst the owners; or if a partition action is filed, which allows an heir to sell his or her stake. At this point, former tenants in common can choose to enter into a joint tenancy via written instrument if they so desire.

This type of holding title is most common between husbands and wives and among family members in general, since it allows the property to pass to the survivors without going through probate (saving time and money).

Difference between Partnership Ownership and Joint Tenancy

1.Agreement: Joint Tenancy is not necessarily the result of an agreement, but a partnership is bound by the terms of agreement between partners.

2. Sharing of Profit and Loss: Terms of Joint Tenancy may not be based on profit and loss, but partnership is based on profit and loss of the business, as the former does not necessarily involve carrying on of a business, whereas a partnership does.

3. Transfer of Interest: In Joint Tenancy one can transfer his interest to a total stranger without the knowledge of the other co-owners. But in a partnership, a partner cannot transfer such an interest on his own without the knowledge and consent of all other partners.

4. Lien on Property: Joint Tenant has no lien on the property co-owned, neither for expenses nor for what may be due from the others as their share of a common debt, but a partner has.

5. Maximum number of Partners & Owners: In Joint Tenancy there is no pre defined limit for maximum number of co-owners. But if a firm is engaged in financial services, the maximum number of partners should not exceed 10. If the firm is engaged in other businesses, the maximum number of partners shall be up to 20.

6. Claim of partition of property: Under the terms of Joint Tenancy, a Joint Tenant can claim partition of property owned by other co-owner. Whereas in a partnership, a partner cannot exercise such a right. He can sue the other partners for his share in the property of the firm only in the event of the dissolution of firm.