property!

Here are a few things to consider during the process With Trove Easton of Easton Lawyers, Maleny

Difference Between Joint Tenants and Tenants in Common

About to buy a property, but not sure how to allocate ownership?

It’s important to understand how you’re going to own your property. If you’re buying a property with another person, you can own it as joint tenants or tenants in common and this is usually dependant on the relationship between the parties and how you want to own your property.

Joint Tenancy

In a joint tenancy the parties to an agreement for the purchase of property individually hold an undivided equal share of the property. Where both parties purchase the property together, there is no specified percentage as to who owns what. A joint tenant does not have the right to transfer or sell their interest in the property

In order to remove their interest, they must apply to have the joint tenancy severed which will transfer that interest to the other joint tenant

Furthermore, it should be noted that there can be more than two joint tenants to the agreement although it is most common to see joint tenancy in the form of a marriage like partnership.

Tenants in common

When purchasing as tenants in common it provides each individual to the transaction with a certain percentage of ownership. This can be equal, but also be in other percentages. Each party that owns a share of the property has the right to sell or transfer their interest in the property to a third party. This normally occurs when the purchasers are not associated with each other. A common example would be where two or more friends decide to go into an agreement to purchase a property. In this case, each person will be able to own a different percentage based on how much they pay.

Joint tenants and tenants in common and survivorship

The primary difference is in survivorship depending on which approach is chosen, different parties will get the interest of a party that dies. Under a joint tenancy, because the ownership structure cannot be split and there are restrictions to transfer the interest, the death of one party will leave their interest with the other existing party or parties

This is different to a tenancy in common, as parties own individual portions of the property. These portions will become part of their inheritance upon death and will therefore pass on under their estate

Conclusion

If you are planning on purchasing a property with another person, it is vital to understand how ownership of the property will work. A significant part of this is knowing where you want your interest to go if you die.

Seek legal advice before taking action.

Should you have any questions please contact our office on 07 5494 3511 Monday to Friday between 08:30 and 17:00 AEST. Take care everyone!

Easton Lawyers

Web Address: http://eastonlawyers.com.au/