Joint Tenants or Tenants in Common?
Joint Tenants or Tenants in Common – what do they mean? This is an important yet very
common question. In this article, we will explain the difference between these two types of
ownership, and how they apply to you.
When you need to consider it.
The question becomes applicable when there are two or more owners of a property.
Whether you decide on Joint Tenants or Tenants in Common, it will define who inherits your
share in that property when you pass away.
“Joint Tenants” refers to an equal share of the property.
When you sign your paperwork as “Joint Tenants”, it means that upon your death, the
interest of the deceased owner will pass automatically to the remaining survivor(s).
This is the most common option for couples (partners/married) with some exceptions including if you have children from a former relationship and the intended co-owner is not the natural parent of your children or if you are buying the land for business or investment purposes.
There are no defined shares held by Joint Tenants.
In the event of a death occurring, the surviving party registers the death at the Lands Title Office with the help of your Conveyancer and ownership is transferred in its entirety to the surviving party.
In basic terms, if you and your partner purchase a property as joint tenants; and your partner passes away, you will then become the sole owner.
Tenants in Common
This is a common ownership structure when each owner holds a separate share.
On the death of an owner, the deceased’s share in the land will not pass automatically to the remaining owner(s) but will pass in accordance with the Will once probate has been granted. You can transfer, borrow against and otherwise deal with your share in the land subject to the consent of the other owner(s).
You should consider holding the land as Tenants in Common, if (for example):
- You wish to leave your interest in the land to someone other than the other owner(s) (e.g. business associates or friends are purchasing land together or where you have children from a former relationship and you wish to benefit those children in your Will); or,
- You wish to hold different percentages in the land (such as where the contribution of capital by each purchaser is unequal).
How Tuckfield help you to decide: Joint Tenant or Tenant in Common.
When deciding on Joint Tenants or Tenants in Common, will discuss your current situation and future goals with you. We explain it in simple, easy to understand terms. You can then make an informed decision about how to proceed.
Tuckfield Conveyancing recommends that you review your Wills whenever purchasing real estate. If you are unsure of how to hold the land, Tuckfields can recommend a lawyer for estate planning.
Give Tuckfields a call today to discuss how we will help you to make this important decision.
Please note: the information provided is of a general nature and is not to be taken as legal advice.
Article written by Tammy Edwards
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Tuckfields does not take responsibility for any errors or omissions obtained from the use of this information.