There are thousands of land sale transactions annually across the great State of Michigan. The vast majority of these transactions involve residential land. People will be purchasing these lands, and most will not have experience or expertise in the area of property law. In particular, they may not understand the implications of the way in which they hold title; title being synonymous with ownership. Purchasers of land, as well as all real estate professionals, should be aware of some basic facts regarding the tenancies that are available to owners.
There are 4 tenancies that I will cover in 4 articles. These tenancies are: 1) the Tenancy in Common; 2) the Joint Tenancy; 3) the Joint Tenancy With Full Rights of Survivorship; and 4) the Tenancy By The Entirety. This article will cover the first of these; the tenancy in common.
If you are buying land, what you learn from this writing can be used in discussing your options with your attorney. Once you and your attorney have decided on a tenancy that is proper for your situation, the deed to your land can be drafted properly and, most importantly, the deed will satisfy your intentions.
The Tenancy in Common
A tenancy in common is created in two or more grantees.
The following two examples demonstrate how a tenancy in common is created by deed:
#1: A, owner of Lot 1 in Smith’s Subdivision, conveys to B and C. This creates a tenancy in common held by B and C.
#2: A, owner of Lot 1 in Smith’s Subdivision, conveys to B and C, as tenants in common. This also creates a tenancy in common.
Tenants in common are, in fact, tenants in common. They share a common tenancy. Each tenant has the right to occupy and use the premises on equal footing. It is also assumed that each tenant holds an equal ownership share in the property. In other words, two tenants would each own a 50% interest. However, tenants in common are free to apportion interests. For example, title can be held by Bill Smith, as to a 75% interest, and Bob Jones, as to a 25% interest. It is up to the tenants to decide.
Conveyance by co-tenant.
As a co-tenant in a tenancy in common, you have very little control over the actions of a fellow co-tenant. He or she may convey their interest to another, leaving you with a new co-tenant. Whether this transfer will benefit or burden the remaining co-tenant is pure chance, but you must understand that your co-tenant(s) may change throughout your ownership period.
Death of co-tenant.
Let’s say that Bill Smith and Michael Thomas hold title as tenants in common.
Bill Smith subsequently dies. What happens to Bill’s interest and how does this affect the title?
Answer: Bill’s undivided ½ interest would pass to his estate. It would then be up to probate proceedings to administer Bill’s estate. Michael’s new co-tenant will be determined through such proceedings. Again, whether the successor to Bill’s interest benefits or burdens Michael is pure chance.
**Male ownership and dower.
As of April 6, 2017, dower is abolished in Michigan. Now, a married man who holds title individually, or as a tenant in common with another, may convey his land free of any dower right previously held by his wife.
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