Tenancy by the Entirety: 5 Costly Traps for Sellers

Tenancy by the entirety is a married-couple title form. It forces both spouses to sign the listing, the deed, and the closing papers, or nothing transfers. Five traps wait at sale, from a one-spouse signature to a federal tax lien. I’ll walk through each one in the order it tends to hit you.

What Tenancy by the Entirety Means the Day You Decide to Sell

I start from Cornell’s Wex page because the definition is short. The last clause is the one that bites at listing. Tenancy by the entirety is a type of shared ownership of property that roughly half the states recognize, available only to married couples. Spouses who hold this way each own an undivided interest in the property. Each has full rights to occupy and use it, plus a right of survivorship. They also cannot transfer their interest without the consent of the other spouse. That last rule is the one that governs sale day.

On sale day, that clause turns into signatures. Both names go on the listing agreement. Both names go on the deed. Both of you belong at the closing table. A single-spouse signature doesn’t convey anything, because neither spouse can transfer an interest without the other’s consent. I’ve watched a contract sit unsigned on the second line while a buyer waited, and the wait was the whole problem.

People mix this form up with tenants in common, and I don’t blame them. A tenant in common can often deal with their own share. This form doesn’t let one spouse do that. The difference shows up the first time someone tries to list or sign alone.

The 5 Costly Traps When You Sell a Home Held as Tenants by the Entirety

Most pages I see on this title form talk about protection while you own the house. The question I get is different. A couple already owns it this way, they want to sell, and these five traps are what I’d check before the sign goes up.

1. One spouse signs the listing or the contract alone. Neither spouse can transfer an interest without the other’s consent. That one signature cannot convey the property. I still see it happen when a spouse is traveling, and the listing looks fine until a title company reads the deed.
2. A divorce finalizes while the house is listed. The ownership form can convert without anyone editing the MLS remarks. Florida’s statute turns entireties owners into tenants in common the moment the marriage is dissolved. Each ex-spouse then holds a separate share they can transfer on their own.
3. A spouse dies and the death never reaches the record. The survivor lists a house whose title still shows two owners. A buyer’s title company stops the closing until the record matches the living seller.
4. A federal tax lien against one spouse. Couples budget for a state-court creditor and treat the house as unreachable. A federal tax lien is a different animal. The Supreme Court held that a husband’s interests in entireties property constitute property or rights to property to which a federal tax lien may attach.
5. You move, and you assume the old deed still works the same way. Some states don’t create this form the way your last state did. Ohio’s statutory deed form now creates a survivorship tenancy, and a separate section preserves tenancy-by-the-entireties deeds executed and recorded before April 4, 1985. Pull your deed and your recording date before you guess.

Which States Recognize Tenancy by the Entirety, and Why the Answer Moves

Sellers want a clean national list. I won’t pretend I have one they should trust from a blog. This is a state-by-state question rather than a federal rule. Cornell’s definition calls the form “recognized in most states” and available only to married couples. By most counts it is closer to half the states, so do not assume yours is one of them. The three states below are ones you can verify from the statute text yourself.

Florida is the one I flag first, because the conversion rule is what sellers miss. Fla. Stat. 689.15 says the right of survivorship does not prevail for joint tenants, except in cases of estates by entirety. The same provision says that in cases of estates by entirety, the tenants upon dissolution of marriage shall become tenants in common.

Maryland is more about who may grant. Md. Code Real Property 4-108(b) says any interest in property held by a husband and wife in tenancy by the entirety may be granted by both acting jointly. That subsection lists other paths too, including one spouse granting to the other in severalty. For a market sale, I treat “both acting jointly” as the working instruction.

Ohio shows what happens when a form doesn’t stay frozen across a state line. R.C. 5302.17 sets out a statutory survivorship deed form. A deed that follows that form creates a survivorship tenancy in the grantees. R.C. 5302.21, effective April 4, 1985, says sections 5302.17 to 5302.20 do not affect deeds executed and recorded before that date that created a tenancy by the entireties. Those older deeds continue to be valid. The spouses don’t have to prepare a new survivorship deed unless they choose to.

I’m not telling you Ohio wiped the form out. I’m telling you the paper in your file, plus its recording date, is what a title company will actually read. Check your own state, and don’t trust a list. Including mine.

The Federal Tax Lien Exception Almost Nobody Warns Sellers About

Estate-planning pages bury this one, and I think they bury it because it ruins the protection story. United States v. Craft, decided April 17, 2002, is the case I send sellers to when one spouse has a tax problem. The husband failed to pay assessed federal income tax liabilities. A federal tax lien attached to all of his property and rights to property under 26 U.S.C. 6321.

After the notice of the lien was filed, the couple executed a quitclaim deed to the wife. It purported to transfer his interest in Michigan property they owned as tenants by the entirety. The IRS later agreed to release the lien and allow her to sell. Half the net proceeds were held in escrow pending determination of the government’s interest. Escrow here just means the money sat in a holding account until a court said who owned it. She sued to quiet title to those proceeds, which means she asked a court to declare them hers.

The government argued its lien had attached to the husband’s interest. Lower courts fought over whether he even had a separate interest under Michigan law. The Supreme Court held that the husband’s interests in the entireties property constitute property or rights to property to which a federal tax lien may attach.

The seller lesson is ugly, and I won’t soften it for a listing appointment. Protection against a state-law creditor of one spouse is the story people arrive with. The IRS is not bound by that story. A quitclaim deed between spouses, signed after the lien is filed, does not undo it.

So order a title search before you list if either spouse has ever had a tax problem. A title company will find this in a day, and that day is cheaper than a failed closing. A tenancy by the entirety will not keep a federal tax lien out of your proceeds.

Divorce, Death, and What Happens to the Title Before Closing

Two life events rewrite this title form. Both like to show up between the listing appointment and the closing table. I handle them as separate problems, because the paperwork is not the same.

When a divorce becomes final

Florida’s statute is the clearest warning I can give you, because it does the conversion in one sentence. In cases of estates by entirety, the tenants upon dissolution of marriage shall become tenants in common. What you held as tenancy by the entirety becomes a tenancy in common in Florida the day the marriage dissolves.

Here’s what that costs a seller. The survivorship right disappears. Each ex-spouse now holds a separate transferable share. The sale still needs both signatures, but for a different reason than before.

Timing is the question I’d take to a lawyer, not to an MLS form. Whether the divorce becomes final before or after closing changes who signs what, and in what capacity.

When a spouse has died

Right of survivorship is the good news. The surviving spouse takes the whole interest. The catch is the public record, because title doesn’t update itself when someone dies. A buyer’s title company wants the death recorded before it insures a living seller, and an old deed showing two names is why.

Gather the packet now, not the week of closing. I’ve seen that scramble at the worst possible time. I’d want a certified death certificate and whatever the county recorder wants filed. A transfer on death deed is a related tool for a different problem, a way to name a beneficiary in advance. Recording a death against an existing tenancy by the entirety is still its own job.

What Tenancy by the Entirety Blocks When You Sell Without an Agent

Sellers ask me whether this title form stops them from listing the house themselves on the MLS. It doesn’t. It changes who signs, not how you list. Both spouses sign the listing paperwork and both sign at closing. That’s true whether a full-commission agent listed the house or the owners did it themselves.

Then the money, which both of you have to agree on. The median existing-home price for all housing types in July 2026 was $434,100, a 2.0% increase from one year ago ($425,700). With a traditional listing agent you’d pay 2.5 to 3 percent of your sale price just to get on the MLS.

HomeRise Essentials is $95 to list plus a $495 closing compliance fee at settlement. The Advanced plan is $495 to list plus a $995 fee at settlement. Either way, the compliance fee is charged only when the home sells. At that median, 2.5% of $434,100 is $10,852.50 and 3% is $13,023.00. Against $590 for the $95 listing plus the $495 fee, the difference is $10,262.50 at the 2.5% end.

Sellers who want that math can get the house listed on the MLS for a flat fee. Florida sellers can do the same through flat fee MLS in Florida. The saving is split between two spouses who both have to agree to it, which is its own conversation.

I get paid when a listing goes live. I’d still tell you not to buy one yet in three situations.

A spouse has died and the death has never been recorded against the title. The couple is mid-divorce and the decree isn’t final. There’s a federal tax lien against one spouse. In all three, settle the title question before the house goes on the market. A listing you can’t close is worth less than the fee you saved by listing early.

Frequently Asked Questions

Can one spouse sell a house held as tenancy by the entirety without the other?

No. Neither spouse can transfer an interest without the consent of the other, so one signature on a listing or a purchase contract can’t convey the property. Both of you sign the listing, both sign the deed, and both show up at closing. I’ve watched a “fully signed” contract collapse when the missing spouse refused. If your spouse is unavailable, pause until you can get a real signature.

What happens to tenancy by the entirety in a divorce?

In Florida, the tenants upon dissolution of marriage shall become tenants in common. The survivorship right disappears, and each ex-spouse holds a separate transferable share, so the sale still needs both signatures for a new reason. Other states write their own rules, so I won’t pretend Florida is everyone. Ask a lawyer whether your decree has already converted the title before you pick a listing date.

Does tenancy by the entirety protect the house from creditors?

Often, yes, against an ordinary creditor of one spouse. That is the reasoning the Sixth Circuit used in the Craft case, holding no lien attached because the husband had no separate interest in the entireties property under Michigan law. It does not stop a federal tax lien. The Supreme Court reversed on that point and held that a husband’s interests in entireties property are property or rights to property to which a federal tax lien may attach. Creditor law is state law, so ask a lawyer about yours. If either of you has a tax problem, order a title search before you list.

What is the difference between tenancy by the entirety and joint tenancy?

They’re close. Both involve an undivided interest, full rights to occupy and use the property, and a right of survivorship. Tenancy by the entirety adds one more rule: no transfer without the other spouse’s consent. It’s also available only to married couples. Joint tenancy is the form people mix this one up with, and it isn’t always as strict on a solo transfer. Read your deed rather than the label people use in conversation.

Do we need to change the deed before we sell a house held as tenants by the entirety?

Usually no. The form already lets both of you convey together if you’re alive, still married, and both willing to sign. You do need to clean up the record first if a spouse has died and nothing was recorded. The same goes for a divorce in motion or already final, or a federal tax lien in the file. Changing the deed as a side project while you list is how people create a brand new title problem.