When two or more people purchase a property, the buyers must nominate whether they will own the property as either Joint tenants or Tenants in Common. But what is the difference?
The main differences between these two types of shared ownership are:
- The proportion of the property you can hold; and
- How the property is dealt with when one of the owners dies.
Joint Tenants
- You must hold the property in equal shares. Eg 2 owners must each hold a one-half share in the property. Eg 50% each only.
- In the event an owner dies, the deceased’s share in the property will transfer to the surviving owner. This is irrespective of any written directions or provisions in the deceased’s Will.
- Holding property as joint tenants is common for married or de facto partners and family as it allows the property to be transferred to the surviving owners without the time and expense of probate.
Tenancy in Common
- The owners may hold the property either in equal or different proportions. Eg 1 owner can hold a 75% interest, and the other owner holds 25%. Or, each owner can hold a one-half share (eg 50% each) in the property.
- In the event an owner dies, the deceased’s share in the property is transferred in accordance with the provisions of deceased’s Will. This means ownership may be transferred to a person who is not already an owner.
- If the deceased owner does not have a Will, the property will transfer in accordance with the laws of intestacy.