Purchasing a Property as Joint Tenants or Tenants in Common? Which one should you choose?

When purchasing real property, that is, a land, a house, a unit, or a lease hold property where the interest in the property is to be held by two or more people, you will be asked the question by your Conveyancer if you would like to be registered on the Certificate of Title as either Joint Tenants or as Tenants in Common.
We understand that these terms are most likely not ones that you will come across very often so it’s worth explaining the difference giving you a clearer understanding about what each holding means to you.
Joint Tenants
Holding interest in property as Joint Tenants means that each registered owner does not have a specific share of the property – all owners have an undefined share in the whole of the land.
When a joint tenant dies, the ownership automatically vests in the surviving joint tenant, and an application to note death should be registered.
Properties owned by husband and wife are quite often held in this manner as it removes the need to have trustees and executors appointed to administer the estate of the deceased joint tenant.
Tenants in Common
Holding interest in property as Tenants in Common means that each registered owner has a separate defined share of the property, for example, 10%, 25%,33% or any other proportion required.
When a tenant in common dies, the share of the deceased will pass to their executor. The executor must apply for probate (permission from the court to deal with the estate) for the deceased estate. When probate is granted, the deceased’s share of the land is transmitted to the executor who, in turn, will transfer it to the beneficiary named in the will.
The method of holding property is often adopted when non-related parties wish to purchase investment property with a view to making a profit.
The security for the beneficiaries of the tenants in common is protected in the event of the death of one of them.
If a couple has been married before and each partner has children from that prior marriage, then the couple may wish to hold the property as tenants in common. This allows the beneficiaries to receive a defined share of the property rather than going to the surviving partner.
For more information and advice about Joint Tenants or Tenants in Common, please contact one of our Registered Conveyancers or File Managers on 8366 7900.