It is a significant life decision when a couple decides to purchase a property together and as part of that process you and your partner will need to decide what type of ownership you want to have over the property. The two most common types of property ownership are joint tenancy and tenancy in common.
Joint tenancy is the most common type of property ownership arrangement that we see for couples, whether they are married or de-facto. As joint tenants, you each own an equal share of the property, regardless of how much each of your contributed to the purchase price. Joint tenancy comes with what is called “the right of survivorship” and the effect of that is when one of the joint tenants dies, their share in the property automatically passes to the other joint tenant or joint tenants by way of “survivorship”. This means, that the deceased’s share in the property does not form part of their estate and does not pass in accordance with the deceased’s Will.
Tenancy in common is a type or property ownership arrangements that we typically see for siblings, friends, or business partners, however, it is still an option available for couples. As tenants in common, you are both still co-owners of the property but your share and interest in the property depends on what your agreement with the other person is and it can be equal or unequal. For example, you can own the property as tenants in common in “equal shares” or you own a “two third share” and the other person would own a “one third share”. The right of survivorship does not apply to tenancy in common which means that if one of the tenants in common dies, their share of the property forms part of the deceased’s estate and does not automatically pass to the other tenant.
The type of tenancy you hold can have huge implications for both your family law matter and your estate planning. If you are recently separated or divorced and own property as a joint tenant, you should consider severing the tenancy as soon as possible so that your share of the property will pass in accordance with your Will.
You are able to sever tenancy without notification to or consent of the other joint tenant. We are able to assist you with severing tenancy, estate planning and family law matters. If you require assistance, contact East Coast Family Lawyers today on (02) 4322 0251 to speak to one of our lawyers.