Unlocking Property Partnerships: The Twin Trails of Joint Tenancy and Tenants in Common

Embarking on the journey of purchasing a property with another person is both thrilling and critical. At Pearson Chambers Conveyancing, our goal is to simplify the complex terrain of property transfer, making it both affordable and devoid of drama. A crucial aspect of this process hinges on deciding the manner in which you'd like to hold the property. This critical choice, known as the manner of holding, is distinctly noted on your property's certificate of title.

There are two primary avenues when it comes to holding a property alongside another individual - Joint Tenancy or Tenants in Common. This division is applicable to all property types and is imperative to comprehend since amending this choice later could be a costly affair with potential unintended repercussions. One of the pivotal factors to consider is whether you desire the property to be included in your will.

This distinction holds significant weight, especially for blended families, friends, or family members looking to purchase property together.

Joint Tenancy

Joint Tenancy is synonymous with unity. When you opt for this path, every individual named on the title owns an equal portion of the property. The fascinating aspect of Joint Tenancy lies in its perpetuity; in the event of an owner's demise, their share seamlessly transitions to the surviving owner. If there are multiple survivors, the deceased’s share is equally distributed among them. Essentially, the living owners continue to possess the property as joint proprietors in equal shares.

Ideal for: Married or de facto couples usually find this arrangement suitable, especially when they intend for the property’s benefits to cater exclusively to their immediate family.

Not ideal for: Blended families or individuals wishing to bequeath a part of their property to offspring from previous relationships or other acquaintances may find this option restrictive. In such scenarios, the property automatically goes to the other person named on the title, bypassing the deceased's will or estate.

Tenants in Common

Tenants in Common offer a flexible alternative, more tailored for relationships that aren’t as closely knit.

Here, the joint ownership may be distributed in equal or unequal shares, and each owner enjoys the liberty to dispose of their share independently. Unlike Joint Tenancy, the shares do not transition to the remaining owners upon an owner's demise; they become a part of the deceased’s estate, to be managed as per their will.

Much like company shares, you along with the other owners get to decide the distribution ratio of the property ownership – it could be 50/50, 50/30/20, etc. The absence of automatic succession means you will need to have a will to elucidate the distribution of your share posthumously. Estate planning advice is strongly recommended to navigate these waters seamlessly.

Ideal for: Investors, siblings, co-owners or parents in blended families usually find this arrangement conducive.

Not ideal for: Married or de facto spouses aiming to secure the property for their immediate family posthumously might find this arrangement unsuitable.

Note: A foresighted approach would be to devise a co-ownership agreement to prevent potential disputes. It’s also prudent to engage in estate planning and maintain an updated will to reflect your current wishes.

Transitioning ownership or amending the manner of holding is feasible, albeit with some stipulations. For instance, transferring a residential property between spouses incurs no stamp duty for your principal place of residence. However, other transfers may attract stamp duty. Before making any amendments, it’s wise to consult with a property lawyer.

At Pearson Chambers, we embody a client-centric ethos, demystifying the conveyancing process for a diverse clientele. Our exemplary customer service ensures a smooth passage through the intricacies of property ownership. Reach out to us at contact@pearsonchambers.com.au or call 0421 058 106 to explore how we can assist you in making informed decisions when purchasing a property.

Disclaimer: The information presented in this article is intended for general informational purposes only and may not cater to your specific circumstances. It should not be utilised as a basis for legal, tax, or accounting advice. The legal advice provided may vary based on individual situations. The expressed viewpoints within this article are strictly those of the author and may not represent or align with those of Pearson Chambers. All content is protected under copyright, owned by Pearson Chambers Pty Ltd