Undivided Property Laws in Texas

Texas, like other states, recognizes two main types of undivided property -- joint tenancy and tenancy in common. It also recognizes community property. Joint tenancy and tenancy in common are derived from ancient English common law concepts, while community property is a relatively new innovation designed for married couples. Real estate and bank accounts are often held as undivided property.


Joint Tenancy

All joint tenants each own 100 percent of the property. If the property is real estate, this means that all have an equal right to live there, and that they cannot sell the entire property without the consent of all the other tenants -- a joint tenant can only sell his undivided interest. If a tenant dies, his interest in the property is extinguished. He cannot bequeath it to his heirs, even under his will. Since a joint tenant can transfer his share without the consent of the other tenants, a creditor of a tenant can become a tenant in the event of bankruptcy.


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Tenancy in Common

Under a tenancy in common, all tenants own an undivided interest in the property. This means that if the property is real estate, no tenant can exclude any other tenant from any part of the property. However, tenants may own unequal shares -- one tenant may own 1/3 of it, for example, and one tenant may own 2/3, which can become relevant in the event of a court-ordered partition. A tenant can bequeath his undivided share by will. Tenancies in common are often used to transfer real estate without capital gains tax under Section 1031 of the Internal Revenue Code. In Texas, joint bank accounts are treated as tenancies in common absent an agreement to the contrary.


Community Property

Texas is one of a minority of states that recognize community property between married couples. Under a community property system, all property acquired during a marriage belongs to both spouses in equal and undivided shares. Community property may be partitioned by court order in the event of divorce, but not necessarily in equal proportions. It belongs to the surviving spouse in the event of death. Complications arise if the couple lived in a non-community property state during part of the time they were married.


Tenancy by the Entirety

Tenancy by the entirety is recognized by many states, but can only be entered into by a husband and wife. Under a tenancy by the entirety, both spouses own an undivided interest in the property, and neither may transfer it without the consent of the other. If one spouse dies, the remaining spouse becomes the sole owner. If the couple divorces, the property is converted to a tenancy in common. Texas no longer recognizes tenancy by the entirety -- a provision in a document purporting to grant a husband and wife a tenancy by the entirety will not be enforced, and the property will be treated as community property.