National Real Estate Exam (PSI)Property OwnershipEasy
Two unrelated investors, Sam and Priya, purchase a duplex together but Sam contributes 70% of the purchase price and Priya contributes 30%. They want ownership shares to reflect their investment and want each to be able to leave their share to heirs. Which form of ownership best fits their goals?
- AJoint tenancy
- BTenancy in common
- CTenancy by the entirety
- DCommunity property
Show answer & explanationAnswer & explanation
Correct answer: B. Tenancy in common
Tenancy in common allows co-owners to hold unequal ownership percentages and each owner's interest passes to their heirs upon death rather than to the surviving co-owner, matching Sam and Priya's goals.
Why the other options are wrong
- A. Joint tenancy requires equal shares and includes right of survivorship, not inheritance by heirs.
- C. Tenancy by the entirety is only available to married couples.
- D. Community property applies only to married couples in certain states.
Tenancy in Common
A form of co-ownership where two or more people hold undivided interests in a property, which may be unequal in size, with no right of survivorship.
- Owners can hold unequal percentage interests
- Each owner's share passes to heirs upon death
- Default form of co-ownership when unmarried parties buy together without specifying otherwise
Memory trick: Common shares can be uncommonly unequal.