Joint Tenants vs Tenants in Common
By Jeremy Streten
Where you have more than one owner of a property they can either as joint tenants or tenants in common. The difference is a technical legal difference that can have ramifications on the owners of property. We often have agents contact us asking which one should apply in different circumstances; the truth is that the difference is a technical legal difference and should be left to buyers solicitor to determine.
It is important to note that as an agent, you do not need to worry about whether the buyer is buying the property as joint tenants or in tenants in common when drafting the contract. That does not form part of the contract and is something that the solicitor acting for the buyer can insert later.
If you are not aware of the difference the basic difference is that:
- If you are tenants in common you own a certain percentage of the property, whether that be 50% or 99% and the other owner or owners own the other parts of the property;
- If you are tenants in common if you die your share of the property is left as a portion of your estate;
- If you are joint tenants with another owner or owners then you own all of the property with that other person or persons. There is no percentage ownership of the property;
- If you are joint tenants then if you die the other owner takes the balance of the land upon your death; and
- If one of the owners is a company or a trust then it must be tenants in common and cannot e joint tenants.
Joint tenants are usually used for a husband and wife buying a property whereas tenants in common are used where you have multiple investors, investing in a single property and who want to maintain a percentage ownership in the property.
As I said above, the actual ownership is usually something that is sorted out by the lawyer acting for the buyer and any questions should be directed to the buyers lawyer, however this article is designed to give you as an agent information so that you can at least discuss the different options with a buyer if you are ever asked.
If you have any questions in relation to this distinction, please contact me on 07 3667 8966 or Jeremy@smslaw.com.au.