Joint tenancy and tenancy in common are two ownership structures available to people who want to own a property together, in their personal names.
This structure allows people to own a property jointly with others without any reference to the capital investment that the joint owners have contributed.
With this structure, once one person dies, their interest in the property is automatically transferred to the other via survivorship.
This transmission is formalised by signing a simple Authority and Instruction Form and statutory declaration, which a lawyer will be able to draft.
This is a convenient and cost effective option if the person with whom you have jointly purchased the property is the person you ultimately want to own the property upon your death.
Tenants in common
This option is useful when a person wants to leave their half share (or any other percentage share) of the property to someone they are not purchasing with, such as a family member.
The main advantage of this structure is the flexibility it brings, as you specify in your will who is entitled to receive this interest. If you change your mind down the track you simply update your will.
The tenants in common structure details the different ownership interests of the purchasers on the Certificate of Title. For example, if two people were purchasing a property together, the Certificate of Title can state that each person has a half share interest in the property.
With this structure, once one person dies the deceased’s share is transferred firstly to his/her executors, and then ultimately to whoever was specified in the will.
This usually involves a Property Sharing Deed which records respective financial contributions, provides an exit mechanism if one of the parties wants out, and sets out how proceeds of sale (if there is a sale) are to be disbursed.
If you decide to implement this ownership structure it is critical that the wills of those involved are updated.
And of course, another option for purchasing property for more than one person is to purchase the property in the name of a company or trust. Our property law specialists will be happy to discuss any of these structures and which might be best for your situation with you. Please give us a call.