When you’re buying a house, tenancy refers to how ownership is held. There are three common options:
Joint tenancy: When two or more parties own a property, each person is a co-owner. Each person owns an equal share of the property, and if one of the co-owners dies, that person’s share is evenly divided between the surviving owners. When the property is sold, proceeds from the sale are evenly divided.
Tenancy in entirety: A type of joint tenancy reserved for married couples, tenancy in entirety ensures that property is automatically passed to the surviving spouse should one partner die. In this type of tenancy, neither person can dispose of his or her interest at will.
Tenancy in common: When two or more parties hold concurrent ownership in a property, it is called tenancy in common. Each owner holds an individual, undivided ownership in the property, and they don’t have to be equal shares. Owners can sell their individual share as they wish, and if an owner dies, their share automatically transfers to his or her spouse. If there is a dispute over the sale of all or part of the property, these sales sometimes need to be decided by a court.
Unmarried couples who buy a home together often choose tenancy in common, using a will to ensure that the other partner can inherit the home should one person die.