What is the effect of a mortgage under title theory on joint tenancy?

In jurisdictions that follow the title theory of mortgages, a mortgage is viewed as transferring legal title of the property to the mortgagee (the lender) until the mortgage is satisfied. This principle is significant when considering the implications of a mortgage on joint tenancies.

When one joint tenant places a mortgage on the property, it can have the effect of severing the joint tenancy. This occurs because the unities required for a joint tenancy (such as unity of title, time, interest, and possession) are disrupted. In this case, the mortgage creates an individual interest for the lender, which is inconsistent with the joint nature of ownership shared by joint tenants.

As a result, the joint tenancy transforms into a tenancy in common. Under a tenancy in common, each co-tenant has an individual, transferable share of the property, and the right of survivorship associated with joint tenancy is lost. Therefore, the correct answer highlights that the act of mortgaging the property under title theory leads to a permanent severance of the joint tenancy, changing the relationship between the co-owners. This understanding is crucial for anyone dealing with property ownership and financing options in jurisdictions adhering to title theory.