Joint Tenancy and Cottage Ownership
The concept of joint tenancy is important when it comes to cottage ownership. Sometimes, using a joint tenancy might be considered as a means to pass the cottage to descendants. Or, perhaps there are already several owners of the cottage. Michigan recognizes four types of joint ownership: tenancy in common, joint tenancy with rights of survivorship, joint tenancy with full rights of survivorship, and tenancy by the entireties.
Each type of ownership differs with respect to the rights granted to the owners. For example, a tenancy in common is a “free for all” where each owner has the right to occupy all of the real estate at any given time and can freely transfer his or her interest. A joint tenancy with full rights of survivorship, on the other hand, restricts such transfers and when an owner dies, his or her interest passes to the other joint owners.
What is common to each type of joint ownership arrangement is that none provide guidelines or restrictions regarding how the cottage is managed. Using different types of joint ownership may be appropriate in some situations, but in others may be the source of bitter family dispute. Certain types of joint ownership will allow any one joint owner to sell his or her interest or cause a court ordered partition of the real estate. When cottage owners are considering joint ownership – or have already established that ownership – great care should be taken to ensure the protection of the cottage for the family. Joint owners should always consider other forms of ownership or specific agreements among the joint owners to provide for smooth and efficient cottage management.