Overview

• According to the common law, joint owners can own property as joint tenants with rights of survivorship or as tenants in common without survivorship rights. Tenants who own property as tenants in common may be able to divide or partition their property and lien another tenant's share of property. Furthermore, tenants in common may be able to borrow money from mortgage lenders to encumber their share of jointly owned property. Tenants can own their property equally or unequally, as set forth in their deeds. For example, Tenant A can own a 30 percent share of her house, while Tenant B owns the remaining 70 percent.
  
  

Partitions and Severing Joint Tenancy

• State property laws may vary, and in some states, property owned by joint tenants with rights of survivorship can bestow rights to own property separately with a right of survivorship only at death. For instance, in some states, one co-tenant can borrow money to finance her share of the house, while the other tenant is not liable for repayment. In other states, joint owners who attempt to encumber or lien their homes as collateral for mortgages automatically sever their ownership rights. Thus, in these states, by borrowing money to mortgage her share of property, Tenant A automatically severs the joint tenancy with Tenant B, and they will own their property as co-tenants in a tenancy in common arrangement.
  
  

Lien Theory

• In states that follow the lien theory of property rights, joint tenants can place liens on their property or encumber their property by using their houses as collateral for their mortgages. In lien theory states, tenants can jointly own property as joint tenants with a right of survivorship but place a lien only on her share of property. If she dies before paying off her mortgage, her lender cannot sue the remaining tenant for repayment of her loan. Furthermore, her lender cannot lien the surviving tenant's share of property, since the deceased tenant's share automatically passes to the surviving tenant without the lien. In this case, the lender's claim extinguishes automatically.
  
  

Limitations

• Joint tenants cannot lien other co-tenants' property shares without their consent. They may not borrow money to lien their entire share without knowledge or consent of the other remaining tenants. If they do so illegally, remaining joint tenants can request a partition of land in court. If a court grants the partition, it can order the tenant to pay the other tenants for their shares, thus buying them out. A court also can force liquidation or sale of the house and divide any proceeds between tenants.