“Are you buying the property as joint tenants or tenants in common?” A question often followed by a furrowed brow and the response “what’s the difference?”
When two or more people purchase a property, they need to decide whether they will hold the property as joint tenants or tenants in common.
Joint tenants each own the whole property jointly with the other owners. Upon the death of one of the joint tenants their share automatically goes to the other joint tenants regardless of what the deceased has said in their will. This legal process is called survivorship.
For married or de facto couples who want their share to go to their partner on death, this is usually the tenancy of choice.
Tenants in Common
Tenants in common own their share of the property individually, usually in proportion to the percentage of money they have contributed to the purchase price. The share of a tenant in common who dies will be distributed in accordance with their will. In the absence of a will, their share will be dealt with in accordance with the rules that apply upon intestacy.
Each tenant in common, regardless of the size of their share, has an equal right to possession of the whole property, but not the exclusive right to possession of any part of it.
If you have any questions about this article, please contact Patrick on 1300 MyKeysPlease or firstname.lastname@example.org for further information.
These comments on the subject matter are for general information only and do not constitute advice. Professional legal advice should always be taken before and decision is made.