USA – NEW JERSEY Law and Practice Contributed by: David Freylikhman, Cory Mitchell Gray, David Jensen and Jody Saltzman, Greenberg Traurig LLP
1. General 1.1 Main Sources of Law
Tenancy in Common In New Jersey, tenancy in common is the most frequent form of ownership structure where there are multiple parties that will co-own real estate. Except in the case of spouses or express language in the deed, real property transfers in New Jersey to two or more grantees will create a tenancy in common in equal percentages and undivided (interests are all shared). See N.J.S.A. 46:3-17. Since there is no right of survivorship, upon the death of a tenant in common, the deceased party’s interests transfer pursuant to intestate statutes or the provisions of a written agreement. Joint Tenancy With the Right of Survivorship Joint tenancy is a form of co-ownership that is viewed less favourably in New Jersey than tenancy in common, and is primarily known for having “right of survivorship” which does not occur with a tenancy in common. The rights of a deceased joint tenant automatically transfer to the surviving joint tenants. Pursuant to N.J.S.A. 46:3-17, co-owners must have express lan - guage to create a joint tenancy. Tenancy by the Entirety A tenancy by the entirety is a form of joint prop - erty ownership available only to spouses. Trans - fer of real estate to a husband and wife creates a tenancy by the entirety unless the deed provides otherwise. See N.J.S.A. 3B:9-1. Real property is not typically held in this manner. Life Estate A life estate in New Jersey will convey an inter - est in real property granting the right to possess the property to “life tenant” until the death of a named person. Upon death of the named per - son, the property automatically transfers to a designated remaindermen.
Real estate law in New Jersey requires atten - tion to a variety of substantive skills and practice areas. In virtually every deal, there are tax issues, corporate issues, government issues, environ - mental issues, and labour and employment issues (among others), so the attorney must guide the client and understand the business issues within the framework of the legal issues. 1.2 Main Market Trends and Deals Trends and deals occurring in New Jersey can - not be shared at this time. 1.3 Proposals for Reform The most important reform proposal is New Jer - sey Assembly Concurrent Resolution 89, which proposes a temporary constitutional amend - ment allowing a state constitutional convention convened to reform the system of property taxa - tion, to propose statutory changes.
2. Sale and Purchase 2.1 Categories of Property Rights Fee Simple Absolute
Fee simple absolute is the greatest interest in real estate in New Jersey, granting the owner the full and exclusive right to use, possess, sell, hypoth - ecate and even damage the property. The trans - fer of real property in New Jersey is deemed to be the transfer of an absolute fee simple estate, subject to the terms of the conveyance instru - ment. See N.J.S.A. 46:3-13. New Jersey does recognise variations on fee simple ownership, including fee simple defeasible estates and fee simple estate subject to a condition subsequent.
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