North Carolina General Statutes 41-73. Termination of a joint tenancy with right of survivorship
(a) Events terminating a joint tenancy with right of survivorship due to the collective action of all joint tenants include the following:
(1) The conveyance to a third party by all of the joint tenants of all of their interests in the property held in the joint tenancy, including a foreclosure sale pursuant to a power of sale in a deed of trust.
Terms Used In North Carolina General Statutes 41-73
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Grantor: The person who establishes a trust and places property into it.
- Joint tenancy: A form of property ownership in which two or more parties hold an undivided interest in the same property that was conveyed under the same instrument at the same time. A joint tenant can sell his (her) interest but not dispose of it by will. Upon the death of a joint tenant, his (her) undivided interest is distributed among the surviving joint tenants.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- property: shall include all property, both real and personal. See North Carolina General Statutes 12-3
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Right of survivorship: The ownership rights that result in the acquisition of title to property by reason of having survived other co-owners.
- Tenancy in common: A type of property ownership in which two or more individuals have an undivided interest in property. At the death of one tenant in common, his (her) fractional percentage of ownership in the property passes to the decedent
(2) The execution of an instrument with a third party by all of the joint tenants that does not convey all of their interests in the property held in the joint tenancy to the third party, including a lease, executory contract of sale, option to purchase, or deed of trust, and an intention to terminate expressly appears in the instrument.
(3) The execution of an instrument by all joint tenants for the purpose of expressing an intent to terminate the joint tenancy.
(b) Events terminating a joint tenancy with right of survivorship due to the unilateral action of a joint tenant include the following:
(1) The conveyance to a third party by a joint tenant of all of that joint tenant’s interest in the property held in the joint tenancy, including a foreclosure sale pursuant to a power of sale in a deed of trust.
(2) The execution of an instrument with a third party by a joint tenant that does not convey all of that joint tenant’s interest to the third party, including a lease, executory contract of sale, option to purchase, or deed of trust, and an intention to terminate expressly appears in the instrument.
(3) The execution of an instrument by a joint tenant where the joint tenant is both the grantor and the grantee if the intention to terminate expressly appears in the instrument. A termination under this subdivision is effective only upon the recording, prior to the death of the joint tenant, of an instrument expressing an intent to terminate in the office of the register of deeds in the county or counties where the real property is situated.
(4) The filing by a joint tenant of a petition to partition.
(c) When a termination occurs, a tenancy in common is created as follows:
(1) If a termination occurs under subdivision (1) of subsection (a) of this section because of the conveyance of all of the joint tenants’ interests to a third party, a tenancy in common is created among the tenants as to any proceeds of sale or surplus funds generated from a foreclosure sale.
(2) If a termination occurs because of the execution by all of the joint tenants of an instrument described in subdivision (2) or (3) of subsection (a) of this section, a tenancy in common is created among the tenants.
(3) If a termination occurs under subdivision (1) of subsection (b) of this section because one of the joint tenants conveys all of that joint tenant’s interest to a third party and there are only two joint tenants, a tenancy in common is created between the third party and the other joint tenant. If there are more than two joint tenants and one of the joint tenants conveys all of that joint tenant’s interests to a third party, a tenancy in common is created among the third party and the remaining joint tenants, who continue as joint tenants with right of survivorship as between or among themselves.
(4) If a termination occurs because of the execution by a joint tenant of an instrument described in subdivision (2) or (3) of subsection (b) of this section or because of the filing of a petition by a joint tenant as provided in subdivision (4) of subsection (b) of this section, and there are two joint tenants, a tenancy in common is created between the joint tenant causing the termination and the other joint tenant. If there are more than two joint tenants, a tenancy in common is created among the joint tenant causing the termination and the remaining joint tenants, who continue as joint tenants with right of survivorship as between or among themselves.
(d) The following events do not result in a termination of joint tenancy with right of survivorship:
(1) The filing of a judgment against one joint tenant.
(2) The filing of a bankruptcy petition by one joint tenant.
(3) When married individuals holding an interest as tenants by the entirety in a joint tenancy with one or more other joint tenants divorce. Unless the divorced individuals agree otherwise, the divorced individuals are deemed to hold their existing interest equally as tenants in common as to each other, but as joint tenants with right of survivorship as to remaining joint tenancy holders.
(e) Nothing in this section limits the manner or effect of a termination ordered by a court of competent jurisdiction. (1784, c. 204, s. 6; R.C., c. 43, s. 2; Code, s. 1326; Rev., s. 1579; C.S., s. 1735; 1945, c. 635; 1989 (Reg. Sess., 1990), c. 891, s. 1; 1991, c. 606, s. 1; 2009-268, s. 1; 2010-96, s. 9; 2012-69, s. 2; 2013-204, s. 1.11; 2020-50, s. 2(a)-(c); 2023-46, s. 8.)