Joint tenancy leaves many people vulnerable in the event that the person listed as an owner dies. The arrangement awards two people identical rights to a property. The property rights aren't usually reversible. The arrangement is done in lieu of the much more cumbersome legal process, usually arranged by an estate planning attorney or tax planning expert.
How is it set up?
The adjustment is made to the title of the property. While most states don't require that the rights to the property being documented, it is often a good idea to do so to prevent legal challenges. Any party can do as they wish their interest in the property. The rights of survivorship are tied to the deed for the property.
How did it get on the credit report?
For the home to be listed on your credit report, the owner must have listed you and the relative as joint tenants in the title. If the owner did not do this, someone may have altered the title information to include your name. Your personal info attached to the property and the rights you held to it must have been authorized somehow for any type of sale to take place if there were no financial obligations. The sale cannot take place without your consent, which was provided if the transaction was completed successfully. This means that you were listed along with the relative as having equal rights to the property if the owner dies.
How did it get put up for auction?
Money must have been owed on the property. A notification would have been sent out to both parties. You not knowing you had any rights to the property left the home eligible for auction if you or the other party didn't act. If it was tied to your name and there were any financial obligations connected to it such as a mortgage, loan or property taxes, you could have been part responsible for that if the debt wasn't satisfied. If both parties failed to honor their financial obligations, and if no one acted when notifications were issued, the property could be auctioned off.
A joint tenancy agreement requires signatures from two parties; so your name was signed in the joint tenancy agreement. The same information required to set up a tenancy could be useful in securing financing for the property or taking out a life insurance policy for the deceased person under your name. It's always best to discuss these matters with a licensed legal professional, insurance professional or estate planning expert to determine your rights.