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What Divorcing Couples Need to Know About Real Property

Rachel Alexander July 8, 2020

{5 minutes to read}  Whether married or divorcing in New York or New Jersey, couples are well advised to familiarize themselves with a few fundamentals of real property. Real property, also called real estate, particularly pertaining to spouses, includes co-owned properties such as the marital home, vacation homes, and investment/rental properties. This article concerns itself with introducing some basic real property terminology which couples may encounter during divorce.

There are three types of joint ownership that married people need to know about:

Tenants by the Entirety: The Norm for Married Folks in New York and New Jersey

When a married couple purchases property together they are likely going to own the property as Tenants by the Entirety. They will own it as an indivisible whole. That means that neither owner can sell, gift, transfer or bequeath his or her portion of the house to a third party; neither the whole nor any portion of the property can be transferred without the consent of both parties.

Tenants by the Entirety automatically includes the right of survivorship. That is, should either the husband or wife die, the surviving spouse automatically, by operation of law, becomes the sole owner of the property.

Joint Tenancy

A third type of ownership of real property is called Joint Tenancy. Like Tenants by the Entirety, Joint Tenants cannot solely transfer an ownership interest in the property. The property can only be sold by mutual consent. However, unlike Tenants by the Entirety, a joint tenant is free to break the joint tenancy at any time.

Non-married people can be Joint Tenants With Right of Survivorship, which is similar to Tenants by the Entirety, for non-married people; upon the death of one owner, the property can pass by operation of law to the surviving owner.

With Joint Tenancy, a Right of Survivorship can be added if specifically designated on the deed. While married people generally own as Tenants by the Entirety, including an automatic right of survivorship, Joint Tenancy with Right of Survivorship has different protections and rights, particularly rights against creditors. For instance, excluding instances of fraud, when spouses own as Tenants By the Entirety, the property is customarily not subject to the debts of only one spouse, and is only subject to the joint debts of both spouses. One exception to this is tax debt.

Tenants in Common

Unmarried people, friends, relatives, business partners — really any individuals owning property together — could choose to own property as Tenants In Common. This type of ownership allows an individual owner to own and have full control over his or her portion of the property. For example, if I own one third of a commercial building as a Tenant In Common, generally, I can sell that portion of the building as I wish, independent from the other tenants and without affecting the other tenants’ ownership rights. My share of the property, in effect, operates as a separate entity and can be disposed of as such. Consider, though, that if the property is not a commercial building but a one bedroom apartment, a prospective purchaser may deem it an unwise investment to own a 1/2 interest to live with someone they do not know.

There is no right of Survivorship with Tenants in Common. Should one of the tenants in common die during tenancy (i.e. ownership), the surviving tenants do not automatically inherit the decedent’s share. The portion of that deceased person’s property would pass as dictated in his Will. If the decedent’s portion of the property was owned by a Trust, the property would then pass outside of the estate, pursuant to the terms of that Trust.

Issues of ownership and occupancy should be discussed with your mediator, who can help with much of this, and direct you to a Real Estate attorney when necessary.

In Part 2, we will discuss issues specifically pertaining to transferring the marital home.

This article was written from an interview with real estate attorney Stephane Zwirn. Stephane is a real estate attorney at ZWIRN LAW, PLLC, with offices at 45 Rockefeller Plaza Suite 2000 New York, New York.

Stephane Zwirn





This article is meant as general information for you and does not create any attorney-client relationship. We encourage your questions and if you need further assistance, please follow-up with us.