Joint tenants and tenants in common

Introduction If you are about to embark on the journey of buying property with someone else, you should read this article or do a little research from money management websites such as Love Money. Doing this may help you that purchase that will suit your needs. Similarly if you already own a property with someone else, this article will also be useful reading. Essentially, you must consider how the property is held if there is going to be more than one owner. Usually, as is the case with all legal matters, everything is blissful until there is a dispute. Land law is a particularly complicated area of law. You should therefore ensure you understand your rights and obligations before a dispute occurs.

Note: while the law maybe similar in all states, this article has been written with only Queensland in mind.

Co-owners in Queensland In Queensland there are two methods for Co-owners to hold property. This are: Joint tenants; or Tenants in common.

This distinction also applies to persons who take a lease of or mortgage over, a property. Co-Owners of land in Queensland must be registered as joint tenants or tenants in common. If a transfer of property is silent on the issue it is recognised that the Co-owners hold as tenants in common in equal shares. Of course you might not own the property in equal shares it might be 60/40, or 80/20. If the law presumes 50/50, one of you will lose out.

Tenancy in Common This is where two or more individuals hold property as tenants in common in any shares they choose. For example: A, B,& C purchase a property for $90,000; A contributes $20,000, B, $30,000 and C, $40,000; The transfer is noted as follows "A as to 2/9 share, B as to 3/9 share and C as to 4/9 share as tenants in common"; The holding does not have to represent the partys respective contributions; however this is preferable as it makes things easier for the courts to decide come a dispute.

Each tenant in common has the right to deal with their share of the property separate from the others. So each individual can technically sell or mortgage their share of the property. Of course in practise, this is more difficult.

Why would I choose a tenancy in common? The most important advantage of a tenancy in common is that your shares are protected in the proportions you designate.

This is best illustrated by the death of a tenant. When a tenant in common dies their share of the property passes in accordance with their instructions as set out in their will. It is imperative if you hold any property as a tenant in common that you have a valid and enforceable will, which specifies the person or the organisation which is to receive the benefit of your share of the property.

A tenancy in common is the only holding which allows you absolute control over who will receive your share upon death. If you are in a joint tenancy, the situation is different, as you will see below.