In Florida, there is more than one way to own an interest in real estate. It’s important to understand these ways before “taking title” to the property at the closing table.
One key question in deciding how to own property: is the owner able to convey complete ownership in the future to a third party without the need of having others join in to complete the transaction. Most everyone understands that if they are the sole owner of their property, then its easy to transfer ownership by simply signing a deed to the new grantee.
However, what if you have a shared interest? Lots of people here in South Florida own residential real estate as shared owners. Maybe they are husband and wife. Maybe they are investment partners; mother and son; or heirs who inherited the place. In these scenarios, they are likely “joint tenants” who share ownership, possession and title.
Co-Ownership of Florida Real Estate
There are several kinds of co-ownership here in Florida. The most popular undivided interests are: “tenants by the entirety,” “tenants in common,” and “joint tenants with right of survivorship.”
1. Tenants by the Entirety
Legally recognized married couples under Florida law are allowed to co-own residential real estate here as “tenants by the entirety.” The title to the real estate is in both of their names. Then, when either the husband or wife passes away, the surviving spouse automatically becomes full owner of the entire interest in the real estate. There is no need to probate the deceased’s real estate interest here because his or her interest in the property transfers to his or her spouse by way of the right of survivorship, which is inherent in this form of property ownership.
2. Tenants in Common
Anyone who can legally own real estate in Florida can have a co-ownership interest in the property. Furthermore, there is no set legal limit on the number of co-owners real estate can have.
In Florida, “Tenants in common” is the default form of co-ownership in real estate. A tenancy in common is a form of ownership in which each co-tenant owns a separate fractional share of undivided property. It is characterized by each owner having the right to possession of the property.
The extent of each co-owners interest in the property generally depends upon how much they contributed to it. For instance, if one owner of a Miami Beach oceanfront condo paid 50% of the sales price, he or she owns 50% of the undivided interest in the property (co-tenants are presumed to own equal undivided interests).
In this form of ownership there is no right of survivorship. When a co-owner dies, their interest transfer to their heirs (by intestacy if there’s no will) or according to the co-owners wishes in their will.
3. Joint Tenants with Right of Survivorship
Sometimes, the joint tenants may have a “right of survivorship.” Generally, a joint tenancy with right of survivorship (JTWROS) means that the owners have equal rights to the real estate, share and share alike. If one of them dies then their share is automatically transferred to the remaining living owners.
It’s a form of ownership that has been contemplated by the Florida Legislature. In Florida Statute 689.15, land will not pass upon the death of an owner via a right of survivorship unless specific legal steps are taken.
The law requires “… the instrument creating the estate shall expressly provide for the right of survivorship.” So if you want to take title as a joint tenant with right of survivorship, then you need to make sure that the documentation properly reflects that intent.
Furthermore, there are other legal concerns regarding holding property as joint tenants with rights of survivorship. See our earlier discussion in our post, “In Florida, Shared (Joint) Ownership Can Be a Big Problem If a Creditor Stakes a Claim Against the Property in Joint Tenancy with Right of Survivorship.”
Ending Joint Tenancy or Co-Ownership of Florida Real Estate
Not everyone wants to have shared ownership in real estate. This is especially true if the owners are a married couple going through a divorce. Or, grand-kids who inherit Florida real estate. It may not be financially prudent for them to share ownership in a piece of real estate, or maybe the co-owners just don’t get along.
3 ways to terminate a Florida joint tenancy.
For those interested in learning how to end joint ownership in Florida residential real estate, then Florida law offers the following ways to terminate a joint tenancy:
1. Termination By Operation of Law.
By definition, “joint tenancies with right of survivorship” (JTWROS) exist for a limited time. That’s because this form of ownership ends when one of the joint tenants dies. The dying party’s interest transfers to the surviving owner or co-owners at some point in the future.
The Case of Foreclosure on a Joint Tenant
In the Moring case, a Florida lender filed a foreclosure action against Mattie Moring for failure to pay on a mortgage. As plaintiff, the lender joined Mr. and Mrs. Richard Roundtree in the foreclosure case because they were believed to have a shared interest in the property. DAD, INC. v. Moring, 218 So. 2d 451 (Fla. Dist. Ct. App. 1969).
They did. The ownership here was as Joint Tenants with Right of Survivorship. The deed to the property filed in the St. Lucie County real estate records specifically stated that Mattie Moring and Richard Roundtree were (1) joint tenants with right of survivorship and (2) on the death of either the estate would survive to the other tenant. (Mrs. Roundtree had a legal interest as Mr. Roundtree’s spouse.)
Problems arose when Mattie Moring went and got a loan on the property without bothering to tell Mr. Roundtree. Things got more complicated when Mattie passed away several months after the foreclosure lawsuit was filed.
Mr. Roundtree argued that he now owned the property free and clear. The bank didn’t agree and wanted him to cover the unpaid mortgage.
What happens now? Under Florida law, the court explained, the interest of the joint tenant terminates upon her death prior to the other joint tenant.
The mortgage on the joint tenant’s interest was a “defeasible interest” held by the lender. When Mattie passed away then the lien terminated because the interest held by the mortgagor terminated by operation of law.
The bank lost. The foreclosure action was dismissed by the trial court (and affirmed on appeal).
2. Sell it to a stranger.
One way you can end a joint tenancy in Florida real estate is to sell your interest in the property to a stranger. It is entirely permissible for someone who owns residential real estate in Florida to sell their interest to anyone of their choosing. DAD, INC. v. Moring, 218 So. 2d 451 (Fla. Dist. Ct. App. 1969).
Additionally, in Florida, a joint tenant of residential real estate may sell his or her interest in the property to a total stranger without the consent of the other joint tenants. Harelik v. Teshoney, 337 So. 2d 828 (Fla. Dist. Ct. App. 1976).
Mother Sells Her Joint Interest to a Stranger
In the case of Harelik v. Teshoney, Esther Lawrence conveyed some property in Volusia County to Charles Harelik and his mother, Stella Harelik. Stella was a widow. The deed was specific, conveying the tract to the mother and son as joint tenants with rights of survivorship and specifically not as tenants in common.
Sometime later, Mrs. Harelik conveyed her interest in the property to Lila Teshoney. Mrs. Harelik kept a life estate in the transaction. Charles wasn’t involved in this deal.
Stella Harelik died. Charles claimed full ownership and Lila said no, she had an ownership interest too. Charles filed a lawsuit to have the courts decide who held legal title to the land.
The court considered whether or not the Widow Harelik could gut that deed conveying the land as a joint tenancy with the right of survivorship all by herself.
Can someone who owns land as a JTWROS unilaterally terminate the right of survivorship? Yes.
Citing to the Florida Supreme Court in explanation, the court held it is Florida law that a joint tenant can destroy the right of survivorship. The requirement here is that when she does so, she must end her interest in a manner that prevents her from claiming by survivorship any interest in the subject matter of the joint tenancy.
Since Mother had transferred her interest in such a way that if her son had passed, she could not claim full title as JTWROS, she had ended the joint tenancy. The court called this ending the “unity” between mother and son as co-owners in the land.
So, you can terminate a joint tenancy in Florida land if you transfer your interest to a stranger, because you have done what courts consider to have destroyed “the unity of title” with your joint tenants.
2. Transfer it to another joint tenant.
Another way to terminate joint ownership of Florida real estate is for one co-owner to convey their ownership interest to another joint tenant (or tenants). If there are several joint owners, then the ones who are not involved in the transaction do not have to know about the conveyance, much less approve of it. Countrywide Funding Corp. v. Palmer, 589 So. 2d 994 (Fla. Dist. Ct. App. 1991).
The Case of Countrywide Funding Corp. v. Palmer
In the Countrywide case, Countrywide filed a foreclosure action against a piece of Florida real estate held in a deed jointly by a mother, Adelina Hentzschel, and her son, Jose Baca.
The deed was specific that mother and son owned the home as joint tenants with right of survivorship. Originally, mother Adelina had bought the real estate and then filed the deed as JTWROS for herself and her son Jose.
Later, another deed was filed. This was a quitclaim deed from mother and son to Jose Baca.
After this quitclaim to Jose was filed with the clerk’s office, Jose got a mortgage from Essex Mortgage Company and then refinanced with Bayside Federal Savings and Loan. Bayside then assigned the mortgage to Countrywide.
Then Jose Baca died. Mortgage payments didn’t get paid. The lender, Countrywide, foreclosed.
In the foreclosure action, it was proven that the quitclaim deed was forged. Mother Adelina had never signed that deed. However, Jose had done so.
By signing that deed, had Jose terminated the Joint Tenancy with Right of Survivorship with his mother? Yes.
The quitclaim terminated the joint tenancy with right of survivorship. Now, his mother owned the land as a tenant in common.
Jose had the power to convert that JTWROS to a tenancy in common, without his mother’s knowledge or consent. He terminated the JTWROS by transferring his joint tenant interest to himself as grantee.
The lender had the right to foreclose on the son’s undivided one-half interest in the tenancy in common which resulted from his deed to himself. As between the two innocents, the mother who had been the victim of forgery and the lender who had loaned money, the court sided with the lender.
(Other ways to end a joint tenancy include simply transferring the interest in the property to a family member. Also, one co-owner can seek to partition the Florida real estate. Partition is where the court orders the property sold because one co-tenant has sued another to end the shared ownership of the property. This usually happens when the property is inherited or after a divorce.)
Do You Have a Problem with a Co-Owner of Jointly Owned Florida Real Estate?
Joint tenancies in Florida can be complicated, especially if the owners don’t get along or they can’t decide how the property should be managed (sell, rent, etc.). Both statute and case law can impact how disputes get resolved.
If you are dealing with jointly owned real estate in Florida, a good piece of advice is to speak with an experienced Florida real estate lawyer to learn about your rights, including how the profits are to be divided and how the costs to operate the property are to be shared. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
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