FOXLAW on QLD Property Law

Co-ownership: ‘Joint Tenants’ vs ‘Tenants in Common’ – What’s the difference???

When two or more people buy a property (real property, i.e. land, with or without a built structure) you will be asked by your lawyer how you wish to hold that property.  You will choose either ‘Joint Tenants’ or ‘Tenants in Common’. 

So, what’s the difference?  The key difference is what happens upon the death of one of the co-owners as set out below:

Joint Tenants:  If you hold as ‘Joint Tenants’, each co-owner has a right to the whole of the property, shared equally with the other co-owners.  When one joint tenant dies, the other surviving joint tenant becomes the sole owner (or if there are two or more survivors they continue to hold as ‘Joint Tenants’ between themselves).  This happens automatically!  Regardless of what it says in your Will, the property will pass to the surviving joint tenant (or joint tenants).  Under the current law in Queensland, not even a person who contests a Will by a family provision application can interfere with this!  Most married couples hold as ‘Joint Tenants’.

Tenants in Common: This option allows co-owners to nominate their respective share in the property.  The shares do not need to be equal.  For example, 15%/35%/50%, is an acceptable way for ‘Tenants in Common’ to hold a property (but this is not possible as ‘Joint Tenants’).  Further, on death, a co-owner’s distinct share forms part of their estate and can be left via his or her Will.  Most business partners or investors hold as ‘Tenants in Common’.

Can the type of tenancy be changed?  Usually, yes, but it is easier and more cost-effective to get it right from the start.  A change from ‘Joint Tenants’ to ‘Tenants in Common’ is quite common (and is often done after a couple separates or divorces).  This can be done by agreement between all co-owners or by one co-owner even if the other (or others) don’t agree.  ‘Tenants in Common’ can also be changed to ‘Joint Tenants’, but only if all co-owners agree to do so.

So, when buying real property with another person (or persons), be sure you make a conscious decision as to how you wish to hold the property.  Happy property investing to you all! Till next time… Foxlaw out :)