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Joint Tenancy Exclusion

There are several forms of ownership which property owners can hold vesting title to their real property.  One of the forms of holding title is Joint Tenants.

Prior to the popularity of family trusts, families used joint tenancy as a form of estate planning to transfer the real property from one generation to the next without triggering a reassessment to protect the Proposition 13 factored base year value.

Joint Tenancies are co-ownership interest in real property. A Joint Tenancy must include the four unities:

  • Unity of interest: The interest of each owner is equal.
  • Unity of time: The interest of the owners is acquired at the same time.
  • Unity of possession: The owners have the right of survivorship.
  • Unity of title: The document must specify a joint tenancy vesting. (If a vesting is not specified, it is presumed to be a tenancy in common.)

When joint tenants acquire a real property, there is a change in ownership unless there are applicable exclusions.

Joint tenants who add another joint tenant to the ownership of the property does not trigger a reassessment because the original joint tenants are still on title. This is a creation of joint tenancy where the original transferors are still on title. The added joint tenant is the other than original transferor.

When the other than original transferor is removed from the joint tenancy, this is a reversion back to the original transferors. This reversion does not trigger a reassessment.

Joint tenancy is a form of ownership where individual co-owner real property. Therefore, a trust or a legal entity cannot be joint tenants or joint tenants with individuals. The vesting can only be tenants in common.

Filing Requirements:
When recording the Grant Deed, Quitclaim deed, Affidavit of Death of Joint Tenant or Affidavit of Death of Trustee, complete the Preliminary Change of Ownership report, section A which provides additional information to the assessor for the type of transfer.

What is an original transferor and what is other than original transferor?
If the owners are A & B and A & B grants to A & B & C as joint tenants. A & B are the original transferors. C is the other than original transferor. All transferors must be transferees to establish original transferor status.
If my brother and I own a property as joint tenants, my brother wants to go off title so I add my sister on to title with me as joint tenant. Will this trigger a reassessment?
Yes. This is a 50% change in ownership from your brother to your sister. Thus 50% is reassessed. You and your sister hold title as joint tenants. There is no original transferor status created.
My brother added me on as a joint tenant to the real property. Therefore, I am a 50 percent owner as a joint tenant on title. Why am I being reassessed 100 percent when my brother goes off title?
When your brother added you on as a joint tenant, you acquired the other than original transferor status and your brother acquired the original transferor status according to the joint tenancy rules. Your 50 percent was not reassessed at the time. When your brother went off title only the other than original transferor remained on title. Therefore, the deferred 50 percent and the new 50 percent is reassessed.
If I own the property and add my parents on as joint tenants, do I need to fill out a Claim for Reassessment Exclusion for Transfer Between Parent and Child?
No. According to the joint tenancy rules, you become the original transferor and your parents become the other than original transferor. If you added your parents on as tenants in common then you will need the claim form; otherwise, two-thirds of the property will be reassessed since the ownership percentage is silent and presumed to be equal ownership. No original transferor status is created.
Can I as an individual hold title with another person who wants to hold title in a trust or a legal entity be joint tenants?
No. Only a person can be a joint tenant. A trust or a legal entity may not be a joint tenant.
Can you give me some examples of creation of joint tenancy, how does one become an original transferor (OT) or other than original transferor (OTOT)?

Please contact the San Francisco Assessor’s Office at 415-554-5596 and ask for the Transaction Unit Staff on Duty.