A Tenancy by the Entirety: Understanding Terminations and Mutual Agreements
If you are a homeowner or planning to become one, you have probably come across the term «Tenancy by the Entirety» (TBE). It is a type of ownership that is available to married couples in several states in the US, including Florida, Maryland, and Virginia. In a TBE, both spouses own the entire property jointly, rather than as separate individuals. This means that if one spouse passes away, the other automatically becomes the sole owner of the property.
However, what happens when both spouses are alive and want to terminate the TBE? Can it be done unilaterally? The answer is no. A TBE may only be terminated by mutual agreement or certain legal circumstances, which we will explore in this article.
The most straightforward way to terminate a TBE is by mutual agreement between both spouses. This means that both parties must agree to dissolve the TBE and divide the property according to their wishes.
It is essential to note that both parties must give their consent voluntarily and not under duress or coercion. Otherwise, the agreement may be voided on the grounds of fraud or undue influence.
If both parties agree to the dissolution, they must sign a written agreement that outlines the terms and conditions of the termination. This document may include provisions related to the distribution of the property, payment of any outstanding debts or mortgages, and any other pertinent matters.
In some cases, a TBE may be terminated without mutual agreement. These include:
Divorce: If the spouses get divorced, the TBE is automatically terminated, and the property must be divided according to the court`s order.
Death: If one spouse passes away, the TBE is terminated, and the surviving spouse becomes the sole owner of the property.
Bankruptcy: If one spouse files for bankruptcy, the TBE may be terminated if the bankruptcy court orders the sale of the property to pay off the debtor`s creditors.
Foreclosure: If one spouse defaults on the mortgage, and the property is foreclosed, the TBE is terminated, and the bank or lender becomes the new owner of the property.
In conclusion, a Tenancy by the Entirety is a unique type of ownership that offers certain benefits to married couples. However, terminating a TBE requires mutual agreement between both parties, except in specific legal circumstances. It is essential to consult with a qualified attorney to ensure that the termination is done correctly and legally.