When it comes to property ownership in New South Wales, there are two common ways in which individuals can hold property jointly: as joint tenants or as tenants in common. Understanding the differences between these two forms of ownership is crucial, as it can have significant implications for property rights, inheritance, and financial responsibilities.
Joint Tenants:
Joint tenancy is a form of property ownership where each owner holds an equal share of the ownership interest. This is the way spouses usually buy their home.
- Equal Ownership: In joint tenancy, all co-owners have an equal share of the property. For example, if there are 4 co-owners then each owner will hold a 25% interest in the property.
- Right of Survivorship: One of the most significant features of joint tenancy is the right of survivorship. If one joint tenant passes away, their share automatically transfers to the surviving joint tenants, regardless of the provisions in a will of the deceased.
Tenants in Common:
Tenants in common, on the other hand, is a different form of property ownership with distinct characteristics. Tenancy in common is usually the way that unrelated parties who want their families to inherit their share hold property.
- Equal or Unequal Ownership: In a tenancy in common, each co-owner can hold a different (or equal) share of the property provided that the aggregate of all co-owners’ shares is 100%. The share in the property can be any size from 1% to 99%.
- No Right of Survivorship: Unlike joint tenants, tenants in common do not have the right of survivorship. If one tenant in common passes away, their share of the property is distributed according to their will or, if they have no will, through the rules of intestate succession.
- Wills Are Important: It is crucial for tenants in common to specify their share of the property in their wills. This ensures that their ownership interest goes to the intended beneficiaries upon their death.
Choosing Between Joint Tenants and Tenants in Common:
The choice between joint tenancy and tenancy in common should be made carefully, as it has legal and financial implications. When deciding, you should consider your relationship with the co-owners, your estate planning goals, and your financial arrangements.
If you have further questions or need legal assistance related to property ownership in New South Wales, please do not hesitate to contact us.
