What it is:
Joint tenancy is an arrangement in which two or more individuals occupy a property. Participating tenants each share equally in the rights and responsibilities related to the property.
How it works (Example):
If multiple individuals rent or purchase a property for work or living, each tenant carries joint and several liability in connection with the property. This means that each tenant potentially carries full responsibility for the property in the absence of his or her cohabitants.
For example, suppose two friends, Bob and Jack, rent an apartment together to reduce living expenses. As joint tenants, Bob and Jack are each responsible for paying rent and applicable utilities for the apartment. If Jack leaves without notice and becomes unreachable, any lapse in payments falls solely on Bob.
Why it Matters:
Under joint tenancy, all property rights and responsibilities transfer directly to the remaining tenants in the event that one of the tenants dies or becomes unavailable. If the joint tenants own the property, this transfer occurs without probate.