Buying Property – What is the difference between Joint Tenancy and Tenancy in Common?

When two or more parties buy a property - they must elect to buy as either joint tenants OR tenants in common. Both these types of ownership are forms of co-ownership. But the distinction is very important.

For example – lets say we have David and Victoria who have bought a property.

JOINT TENANTS

If David and Victoria elect to own the property as JOINT TENANTS - then what this means is that if David dies, David’s share in the property will AUTOMATICALLY go to Victoria, and this is regardless of who David has nominated in his Will and vice versa the same will apply for Victoria. In other words, on the death of a joint tenant the survivor by law automatically receives the deceased share regardless of the provisions in a will. This is usually how spouses purchase their home.

TENANTS IN COMMON

If David and Victoria elect to own the property as TENANTS IN COMMON – then what this means is that if David dies, Victoria will NOT AUTOMATICALLY receive David’s share in the property unless Victoria is named as a beneficiary in David’s Will. In other words, on the death of a tenant in common the survivor will not automatically receive the benefit of the deceased’s interest in the property unless specifically named in the Will. This is usually how business partners and associates purchase property.

Should you have any questions or require further information on this topic please do not hesitate to reach out.

George

george@sydneywidelegal.com.au

Mob: 0410658082