Joint Tenancy and Tenancy in Common

Joint TenancyJOINT TENANCY

  • This is a form of co-ownership in which each Joint Tenant owns the whole of the property jointly with the other owner(s). No party has a specific share in the property. This means that the Joint Tenants must have equal interests in the property, and are entitled equally to its rents and profits.
  • There can be two or more Joint Tenants.
  • On the death of one Joint Tenant the surviving Joint Tenant or tenants acquire the whole property automatically by operation of law. It follows that property held in joint tenancy does not form part of the estate of the tenant who dies. So a Joint Tenant cannot deal with property held in joint tenancy in his or her Will.
  • The principle of joint tenancy applies to real estate, as well as to property like cars, shares, furniture and bank accounts.
  • Joint tenancy is common in marriages, where the spouses want to hold the property equally, and also want the property to pass automatically to the other Joint Tenant. It is not so common in other situations.
  • If you hold real estate as a Joint Tenant you can easily sever the joint tenancy and convert it to a tenancy in common. This is something which needs to be seriously considered in many situations especially where a marriage or de facto relationship has broken down.

TENANCY IN COMMON

  • This is a form of co-ownership in which the property is held in common with others but where, in contrast with Joint Tenants, the share of a deceased Tenant in Common forms part of the deceased’s estate and passes to the owner’s beneficiaries under his or her Will.
  • Tenants in Common have fixed undivided shares in the property.
  • Tenants in Common can have unequal shares (for example, two-thirds to one and one-third to the other).
  • Assets held as Tenants in Common do form part of your estate and can be left by Will.

You need to carefully consider which mode of ownership is appropriate to your particular circumstances.  Noel May & Associates can help you chose the best option for your particular situation.
Call the office on (03) 9585 7555 and ask for Noel or Amanda,
or emailnoel@noelmay.com.au