Joint Tenants vs Tenants in Common: What's the Difference?

There are two forms of joint property ownership. You can own property with others as Joint Tenants, or as Tenants in Common.

Joint Tenancy

On the death of one property owner, the property automatically vests in the other(s) by way of survivorship. The property is not dealt with by your Will.

Tenancy in Common

Each property owner owns a distinct share of the property (e.g. a half share) and can separately deal with their share. The property is dealt with by your Will.

Why Does Property Ownership Matter?

We have seen a number of situations where the type of joint property ownership recorded on the Record of Title is not appropriate for the client’s circumstances. The way the ownership is recorded can make a significant difference to the way your assets are distributed on your death.

If you owned a property with another person as joint tenants and you passed away first, the surviving property owner would become the sole owner and will have the ability to deal with the property in any way they like.

When Joint Tenancy May Not Be Appropriate

This may not always be an appropriate form of ownership especially where there are children from different relationships. For example, if you passed away first, your spouse/partner would become the sole owner of the property and if your spouse/partner entered into another relationship and shared the ownership of the property with a new partner (intentionally or otherwise) your children or other people you may wish to provide for will not be able to benefit from the property.

The Flexibility of Tenants in Common Ownership

Alternatively, if you owned your property as Tenants in Common, you could, for example, allow your spouse/partner to use your share of the property and continue to live in the property (or a substitute property) upon your death for the period of their lifetime without your spouse/partner ever taking ownership of your share. This would allow your share of the property to be preserved for the beneficiaries of your Will (e.g. your children), which they would generally be entitled to upon the death of your spouse/partner.

A Tenancy in Common therefore allows more flexibility to deal with your share of the property in your Will.

Potential Estate Administration Issues

Where a property will be transferred to your spouse/partner to the exclusion of other beneficiaries that you have a moral obligation to provide for under the law (e.g. children), the Executor(s) of your Will may be required to sever the Joint Tenancy.

This could result in significant legal costs to your Estate.

Is Your Property Ownership Structure Right for You?

We encourage you to discuss these matters with us if you are unsure how your property is owned or if you wish to restructure your property ownership. As property is often a person's most valuable asset, it is important that your ownership structure reflects your individual circumstances.

As explained above, the way ownership is recorded can have significant implications for the distribution of your assets after your death.

If you would like us to review how your property is owned and discuss whether your current ownership structure is appropriate for your estate planning objectives, please contact the team at Sutcliffe Matson Law today. We can help ensure your property ownership arrangements align with your wishes and provide certainty for the future.

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Joint Property Ownership