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Ownership of Real Property

North Carolina Real Estate Manual, Patrick K. Hetrick, Larry A. Outlaw, Patricia A. Moylan

There are three principle types of ownership involving two or more persons: joint tenancy,
tenancy in common, and tenancy by the entirety.

Tenancy in Common
One of the most common types of ownership existing in North Carolina between persons other
than husband and wife is the tenancy in common. The cooowners are referred to as "tenants in
common". Each tenant in common owns a separate but undivided interest in the land and each
has an equal right to possession and use of the land. Keep in mind that, while they may be
equal, the interests of tenants in common are not legally required to be equal. One tenant could
own a 95 percent undivided interest and another a 5 percent undivided interest. This unequal
percentage of ownership is impossible in a joint tencancy or a tenancy by the entirety.

There is no right of survivorship as far as the tenants are concerned under a tenancy in
common and the undivided fractional interest of any tenant is freely alienable (transferable by
sale or gift), devisable by will, and inheritable.

Joint Tenancy
The joint tenancy form of ownership differs from a tenancy in common in a number of ways.
First and foremost, the joint tenancy can include the attribute of "survivorship". In which case,
when one joint tenant (with right of survivorship) dies, his or her share automatically goes to
the surviving joint tenant or tenants.

One of the major attributes of joint tenancy, however, is the "destructibility" of the survivorship
feature by the unilateral actions of one of the joint tenants during his or her lifetime. Any joint
tenant has the power during his or her lifetime to destroy the joint tenancy and convert it into
a tenancy in common. "... transfer his interest ... by deed...". This transfer severs the joint
tenancy and converts it into a tenancy in common. If either dies, the property will not go to
the other by survivorship.

Additionally, in joint tenancy all joint tenants must hold equal undivided interests in the property
and must receive their interest simultaneously under the same instrument. In a conveyance to
two persons as joint tenants with right of survivorship, each must hold a 50% undivided interest
in the property.

Tenancy by the Entirety
A very important form of ownership widely used in North Carolina is the tenancy by the entirety.
This form of ownership is possible only between a husband and a wife. The incident of
survivorship is still retained. Any conveyance to a husband and wife by deed or will creates a
tenancy by the entirety, unless it is made clear in the instrument that some other form of
ownership is intended.

Where there is a tenancy by the entirety, neither spouse can individually transfer nor encumber
the real property or any interest therein so as to affect or defeat the other spouse's right of
survivorship in the whole property.

A tenancy by the entirety can be terminated only by one of the following methods: 1)
agreement of both husband and wife, 2) valid divorce (which automatically converts the
property into a tenancy in common, unless the divorce decree provides some other form of
ownership), or 3) death of one or both spouses.