Cotenancy: Unique Relationship of Co-Ownership

There are many situations where attorneys must address a client’s co-ownership issues.  The basis of a cotenancy relationship is each owner’s (non-exclusive) right to use, occupy and possess each part of the property.  Cotenants may not exclude other cotenant owners from possessing, using or occupying the same part or parcel.  Texas law recognizes three forms of cotenancy: community property, joint tenants with the right of survivorship, and tenants in common.

Community property is a type of co-ownership that is formed when property is acquired during marriage.  The name on the deed or other title document is irrelevant.  The presumption in Texas is that all property acquired during marriage is owned jointly.  Also, it is a common misconception that community property automatically passes to a surviving spouse.  Especially in situations where the deceased did not have a last will and testament, the property may not pass to the surviving spouse.

Absent specific language to the contrary, if two non-married persons are co-owners then they are tenants in common.  Interests of a tenant in common will pass to that owner’s heirs or to the party named in the owner’s last will and testament.  There is no automatic right that the property will pass to the other owner.

However, if two co-owners wish for the property to pass automatically to the survivor, then they should agree in writing regarding this arrangement by adding the appropriate right of survivorship language to the applicable document.  This is then referred to as a joint tenancy with the right of survivorship.  Property can be converted after acquisition from tenants in common to joint tenancy by executing later documentation.

We commonly receive requests from a spouse for the other spouse to be added to the title.  This can be accomplished by a deed transferring the property into both names.  However, both spouses must execute the deed.  In this scenario the parties can create either a co-tenancy or a joint tenancy with a right of survivorship by utilizing the correct language.  It is important to note that an added spouse in this situation does not automatically become financially liable for any loans previously associated with the property; this only occurs when a note is signed with the bank.  It is important to consult with an experienced attorney in order to create the type of co-ownership you desire.