Joint Tenants vs Tenants in Common


What to consider when deciding whether to buy property as joint tenants of tenants in common

Looking to purchase a property? When deciding the type of ownership to register your property, the most common choices are Tenants in Common or Joint Tenancy. So, which do you choose? In this article, we take a look at both of these types of ownership and their differences.

There are many considerations when purchasing a property and in today’s competitive market and soaring property prices, many are looking to purchase a property in partnership with either a friend or family member to break into the market.

However, where there is more than one purchaser, it will be essential to ensure that the type of ownership registered is the right one for your specific needs.

Joint Tenants definition

Registering a property as Joint Tenants means that each individual named on the title will own the whole property together or “jointly”. Each owner will have an individual interest in the property. An important feature of this type of ownership is the “right of survivorship”.

A “right of survivorship” provides that where one of the joint tenants dies, that deceased person’s interest in the property will then pass onto the remaining or ‘surviving’ joint tenant(s). An important implication of this feature is that the deceased joint tenant’s interest in the property will not form part of their estate upon their death and cannot be distributed to other beneficiaries under a Will.

The process of transferring the deceased tenant’s interest in the property over to the remaining joint tenant(s) is less complex than where a property is registered as Tenants in Common and will require the production of certain documentation such as the death certificate and completion of the relevant application form.

Tenants in Common definition

Tenants in Common, unlike that of Joint Tenants, is a form of ownership that does not provide for the right of survivorship. Under this type of ownership, each individual named on the title will own a share in the property, and this share in the property can be disposed of under that individual’s Will.

In other words, where an individual is registered as a Tenant in Common, their share in the property can form part of their estate upon their death and will be distributed in accordance with their Will.

An important implication of this feature of property ownership is that the transfer of the share of the property will be dependent upon the individual’s last Will.

Therefore, should you choose this type of ownership, ensuring that you also have an accurate and up to date Will outlining how you would like to dispose of your share in the property, will be an essential consideration.

It is important to note that the transfer process in these circumstances can be quite complex and lengthy where there is no Will.

What else to consider?

Another important consideration which ties into the key difference between Joint Tenants and Tenants in Common is the relationship between you and the other purchaser(s).

If you are a married couple, it may be that you wish for your interest in the property to directly pass onto your surviving spouse. In that case, registering as Joint Tenants would be appropriate.

However, if you are in a new relationship or a relationship that forms a blended family, or you are purchasing with a friend or other individual, you may wish for your share in the property to be transferred to someone else on your death. In that case, registering as Tenants in Common would be appropriate.

What if I am already registered as a joint tenancy? Can I unilaterally sever a joint tenancy?

There are a number of reasons why the type of ownership registered may need to change; for example, separation or divorce, breakdown in the relationship, disputes, or simply changed circumstances in which it is no longer suitable to remain registered as Joint Tenants.

The process of changing the ownership from Joint Tenancy to Tenants in Common is known as ‘severance’.

This process ‘severs’ the joint tenancy, making you and the other property owner(s) Tenants in Common. This will allow distribution of your share in the property under your Will upon death.

In order to ‘sever’ a joint tenancy, you will need to complete the relevant forms and pay the appropriate fee. In Victoria, this will include the Transfer of Land form. This form will require you to specify the circumstances in relation to the transfer.  You can find out more about this on the Victorian Land Registry Services guides and forms site.

Get help

It is prudent that you obtain legal advice to discuss these important considerations and ensure that you are making the right choice that suits your needs and circumstances.

Thinking about purchasing a property or changing the type of ownership? Or are you needing to write/update your Will or discuss Estate planning? Talk to one of our experts for legal advice.

Contact David Davis Lawyers

Phone: 03 9014 1299
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