When three people purchase real property in New York together, three names are on the deed. What happens when one person dies? Who now owns the property?
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The deed is what will show who owns the property
When three names are on a deed and one person dies, the first thing a lawyer would do is scrutinize the language of the deed. If there are three owners, there could only be two types of joint ownership: joint tenancy with rights of survivorship or tenancy in common. If the deed is silent as to the kind of ownership, the presumption is that the co-owners own it under tenancy in common.
In a tenancy in common, the death of one owner in the deed transfers his interest to his estate and not to the surviving co-owners. In a joint tenancy with rights of survivorship, the death of one person in the deed results in the transfer of the entire interest on the real property to the remaining survivors.
In determining who will be the owner of the property when three names are on the deed and one person dies, the lawyer will first check the language of the deed. If we’re lucky, the deed will already state the type of ownership among the co-owners. For example, it will be A, B and C, as joint tenants or joint tenants with rights of survivorship, or A, B and C, as tenants-in-common. In New York, joint tenants and joint tenants with rights of survivorship are used interchangeably and mean the same thing.
Joint tenancy with rights of survivorship
When three names are on a deed where the co-owners are all joint tenants, and one joint tenant dies, then the property passes to the other surviving co-owners. In the example above, if A, B and C own the property as joint tenants with rights of survivorship and A dies, the deed will be transferred to B and C as joint tenants with rights of survivorship. A’s estate does not have a claim over the property. B and C can initiate the transfer by simply submitting to the land records office, sometimes called Register of Deeds or County Recorder, an affidavit together with A’s death certificate. The affidavit or declaration will typically contain a legal description of the property, a statement that the property was held in joint tenancy with rights of survivorship, a reference to the deed that transferred the property to the joint tenants, the name and date of death of the deceased joint tenant, and the name and signature of the surviving joint tenants.
Tenancy in common
When three names are on a deed where the co-owners are all tenants in common and one co-owner dies, the share of such deceased co-owner passes to his estate. In the example above, if A, B and C own the property as tenants-in-common and A dies, A’s share does not go to B and C, but instead goes to A’s estate. In order to initiate the transfer of A’s share, however, the executor or heirs of A have to file a petition for probate or administration. This makes the transfer to A’s beneficiaries a little bit longer and more expensive.
Joint tenant’s termination of joint tenancy
A joint tenant can terminate joint tenancy in two ways: (a) selling his own interest in the property to a third party; (b) executing and delivering a deed to the other joint tenants that evidences an intent to sever the joint tenancy; or (c) filing an action for partition.
A joint tenant’s severance by deed does not affect the rights of survivorship of the other joint tenants. For example, A, B and C hold the property as joint tenants with rights of survivorship. A wishes to terminate the joint tenancy and sell his share to D. Now, B, C, and D own the property. B and C, with respect to each other’s 1/3 share, are joint tenants with rights of survivorship. D, on the other hand, with respect to B and C, are considered tenants in common.
A joint tenant cannot sell the entire property but only his interest in the property. When the joint tenant sells his interest to a third party, the joint tenancy with right of survivorship terminates, and the new joint tenants own the property under tenancy in common.
The joint tenant cannot dispose of his share via will with the intent of terminating the joint tenancy. The deed will override the will. The property under joint tenancy will not pass through probate and will be transferred to the surviving joint tenant. If the joint tenant seeks to terminate the joint tenancy, the joint tenant must, in his lifetime, either transfer it to a third party, file an action for partition, or execute, deliver, and record a deed of severance to his joint tenants.
Issues about joint tenancy with rights of survivorship
Although joint tenancy with rights of survivorship is more often seen in real estate, this type of ownership can also appear in bank accounts. Different laws apply in joint tenancy in bank accounts as opposed to real estate.
Because joint tenancy with rights of survivorship avoid probate, many parents own real property in this manner with their children. However, issues always arise when only one child is included in the deed of the property. In this case, the surviving joint tenant who is the deceased joint tenant’s child claims the entire real property, to the exclusion of the other siblings, giving rise to legal disputes.
Setting aside a deed of joint tenancy during the lifetime of a joint tenant
Sometimes, one joint tenant pays for the entire property and simply adds the other joint tenants by mistake without knowing the consequences of his actions. In this case, to set aside a deed of joint tenancy during the lifetime of one joint tenant, such joint tenant can file an action for reformation within six (6) years from the mistake.
Setting aside a deed of joint tenancy after the death of a joint tenant
Questioning the validity of a deed of joint tenancy by the heirs after a joint tenant’s death is similar to questioning the validity of a will.
Some grounds for questioning the validity of a deed of joint tenancy are forgery, fraud, and undue influence. To be successful, we usually use a combination of different grounds to prove that the deed is not valid, such as the employment of fraud and undue influence upon the deceased.
Undue influence occurs when the intent of the grantor has been constrained by a force so strong that it has overcome his own free will. In joint tenancy with rights of survivorship, the property is usually owned alone by the deceased joint tenant. Prior to death, the deceased joint tenant transfers it to himself and the child as joint tenants, to the detriment of the other siblings.
To prove undue influence, medical records of the deceased joint tenant at the time the transfer can be obtained to see whether the deceased was under strong medication that could alter his senses. Other documentary evidence, such as correspondences and notes, and witness depositions, such as the lawyer who drafted the deed, can also be used to prove whether the deceased was under undue influence when the deed was executed. If the deed is set aside, the property then passes through the deceased joint tenant’s probate.
When three names are on the deed and one dies, one should scrutinize the deed to see if there is a description on the kind of ownership between the co-owners. If none, legal presumptions may apply which can be rebutted. If you have issues regarding the transfer of ownership to you after a co-owner dies, we at the Law Offices of Albert Goodwin are here for you. We are located in New York, NY. You can call us at 212-233-1233 or send us an email at [email protected].