When you buy a property with other person, you have the option to buy it as joint tenant or tenant in common. Both of these, have pros and cons attached to it. Lets analyse both.
Joint Tenant
Joint tenancy is the equal ownership of a house by every party involved. All parties must take ownership of the same deed at the same time. It is most commonly used when married couples purchase a house. Each person would be given a 50% stake in the house. If one person in a joint tenancy dies, full ownership of the house will be awarded to the other person in the joint tenancy without the need to go to the Court for a probate. This rule is applicable regardless if a will is in place or not. Joint tenants still need a will though. If both were to die at the same time, a will would be necessary to determine who would take ownership of the home. Joint tenants possess a right of survivorship, that is, the interest of a deceased joint tenant passes to the surviving joint tenant(s).
Tenant in Common
A tenancy in common is most commonly used when there are multiple investors in a property and each want to protect their individual investments. Each member of a tenancy in common can hold a different share in the property. One member could hold 25%, while another holds 60%, and another holds 15%. Even if you have a small holding, you still have a right to the use of the entire property. Every individual member in the tenancy in common has complete control of their shares in the property. They are able to sell their shares whenever and to whoever they wish without consulting the other members. If a member dies, their individual shares are transferred to their heirs.Tenants in common do not possess a right of survivorship and on their death their interest passes according to the terms of their will. If a tenant in common dies intestate (without a will) their estate is distributed according to the Wills, Probate and Administration Act 1898.
Which is better?
You should choose joint tenancy or tenant in common is completely dependant on your person circumstances. Both options are there for you to choose, depending upon the reason to purchase the property and the parties involved in the transactions.
To know more about it and for your conveyancing needs, you can contact Lawwiise Lawyers. We have fully qualified and experienced lawyers to service your conveyancing needs. Contact: lawyers@lawwiise.com.au or ring us on 0466992844.
