Property can be owned by multiple people or entities at any given time. While sole ownership is a relatively simple model of ownership, there are three ways that property can be owned by multiple individuals. Specifically: (1) as tenants in common; (2) as tenants by the entirety; and (3) “not as tenants in common, but with the right of survivorship.” Each one conveys different meaning and can have radically different implications in a real estate transaction.
Tenants in Common
The default stance of ownership if nothing is said is that the multiple individuals take the ownership as “tenants in common” with equal fractional interests. So, if a deed says “From Person A to Persons B and C” but nothing more, we would treat that as Person A granting persons B and C each an undivided ½ interest in the property. An undivided half interest means that both Person B and Person C can make use of the entire property [the meaning of the “undivided interest” language], but if the property is sold or encumbered, each individual would only get ½ of that profit/debt. All rights attached to the property are equally shared, so if there are minerals or timber rights on the land, Person B and Person C can contract to sell those minerals or timber products and the profit of the sale should be shared evenly between the two parties. Typically, the cotenant cannot bind the fellow cotenant to a contract, so it is highly unlikely that Person B could sell half the land’s timber and keep the profits; the sale of the shared right to timber profits would require consent from both cotenants.
Nonetheless, each individual can sell their individual share of the property right; so Person B could sell their undivided ½ interest to Person D without requiring Person C’s approval. If Person B incurs personal debts, the creditors are able to take the debtor’s individual undivided share of a property; which can result in a bank or a lender suddenly becoming a co-tenant. Tenancy in common can, if operated in a cavalier manner, result in strange bedfellows and unpredictable shared ownership; this tends to be why purchasers prefer to purchase complete ownership of land rather than fractional undivided interest.
Tenants by the Entirety
When a conveyance of real property passes to a pair of individuals who expressly and clearly declare themselves taking the property as spouses, the tenancy is considered a “tenancy by the entirety.” The Oregon Family Fairness Act of 2007 made it so that domestic partnerships would equally be entitled to tenancy by the entirety. Traditionally, the married couple was treated as a singular legal entity, so the ownership of the property of a married couple was considered as being jointly owned by the marital estate. Parties can deviate from this through express statements, but we will otherwise extrapolate a tenancy by the entirety from language like “I convey ½ of my undivided interest to my spouse, [Name].” The tenancy by the entirety creates an “indestructible right of survivorship” in the property. The property is technically not owned in half interests, rather both own the entirety of the property; the real estate cannot be partitioned or conveyed unilaterally, so creditors cannot force the sale of a husband and wife’s property if the husband individually incurs a debt. If one of the owners of a property held by the entirety happens to die, the property is treated as automatically passing to the surviving spouse, provided that a death certificate is recorded in the county alongside the deed to prove the death of the spouse occurred more than 120 hours ago [the Uniform Simultaneous Death Act requires survival by at least 5 days]. This is not the same thing as inheritance, where a probate would be opened and administered, rather the cotenant’s survivorship interest means that the property is never passed to the dead person’s estate, rather the survivor’s interest simply grows to fill the void of the deceased cotenant.
Divorce or annulment will transform the tenancy by the entirety into a tenancy in common. Worth noting as well, unmarried individuals who claim to be married on the deed will be treated as taking the property as tenants in common. This is based on Emmons v. Sanders, 217 Or 234 (1959), where a husband and wife purchased property together as tenants in common, but it was found that they were first cousins and therefore their marriage was void at law and they no longer benefitted from a tenancy by the entirety.
Right of Survivorship
At common law, parties can own property with a survivorship right, much like tenants by the entirety. However, Oregon abolished the concept of “joint tenancy” sometime in the late 1800s and as a result, all persons with an “undivided interest” in real property are tenants in common unless you very specifically and intentionally say that a right of survivorship is being retained by the parties. This had the effect of creating indestructible rights of survivorship for the cotenants with rights of survivorship, where neither party can independently revoke or end the right of survivorship; rather, both parties would need to agree to convert a tenancy from a survivorship interest into a common interest. Much like tenants by the entirety, if a cotenant dies, the surviving cotenant’s interest in the real property grows to fill the decedent’s void after evidence establishes that the survivor outlived the other cotenant by at least 5 days [120 hours]. If both parties die within a 5 day period, each decedent’s estate inherits an undivided ½ interest in the property where each individual’s estate take the property as a tenant in common.