In Texas, co-ownership of property is a common arrangement, especially among family members, business partners, and married couples. Co-ownership occurs when two or more individuals hold title to the same piece of real property. Understanding real estate law in Texas helps determine how those interests are divided.
Property law recognizes three primary forms of joint ownership: (1) Tenancy in Common, (2) Joint Tenancy with Right of Survivorship, and (3) Tenancy by the Entirety (although this type is not formally recognized in Texas, a similar effect can be achieved for married couples). Each form carries unique rights and responsibilities, and understanding the distinctions is important.
1. Tenancy in Common
Tenancy in common is the default form of co-ownership in Texas unless another type is expressly stated in the deed. Under this structure, each co-owner (called a “tenant in common”) holds an individual, undivided interest in the property. The shares do not need to be equal, and each tenant has the right to possess and use the entire property regardless of their ownership percentage.
When a tenant in common dies, their interest in the property passes according to their will or through intestacy, not automatically to the surviving co-owner. Additionally, each tenant can sell, mortgage, or transfer their share independently, without the consent of the other co-owners.
If disputes arise, any co-owner can seek a partition of the property through a court proceeding. The court may physically divide the property or order a sale and divide the proceeds.
This form of ownership is often used when unrelated individuals purchase property together or when property is inherited by multiple heirs.
2. Joint Tenancy with Right of Survivorship
Joint tenancy with right of survivorship is a more restrictive form of co-ownership that must be clearly expressed in the deed or title. This form allows co-owners to hold equal shares in the property and includes a right of survivorship, meaning that when one co-owner dies, their interest automatically transfers to the surviving co-owner(s).
A joint tenant may sever the joint tenancy by selling or transferring their interest. This process converts their share into a tenancy in common.
This form of ownership is popular among spouses or close relatives who want to ensure property passes automatically upon death.
3. Community Property with Right of Survivorship
Texas is a community property state. This means property acquired during marriage is generally owned equally by both spouses, unless it qualifies as separate property. Community property offers certain protections from individual creditors of one spouse. While Texas does not formally recognize tenancy by the entirety, spouses can achieve a similar structure through a Community Property with Right of Survivorship agreement.
This form of co-ownership applies only to married couples and allows the property to pass directly to the surviving spouse upon death.
The spouses must sign a written agreement specifying that the property is held as community property with right of survivorship. This is an increasingly popular choice for married couples.
Contact an Experienced Houston Property Lawyer for Help
Co-ownership can be a flexible and practical way to hold real estate, but the type of ownership chosen has major implications for those who hold an interest in the property. If you are interested in owning property jointly, you should consult an experienced Texas real estate lawyer for help understanding your rights and which form of joint ownership may be best for you.
Contact Porter Law Firm today to schedule a consultation to learn more about your options.