Are you thinking of purchasing a property? Are you purchasing jointly with someone else? You might need to stop and think about whether you want to purchase as JOINT TENANTS or TENANTS IN COMMON? Not sure what we're on about? Read on as we explain the difference between the two, the pros and cons...
In this fast moving world more and more people are prioritising their careers and traveling before marriage. On the other hand, we have seen an increase in the joint home ownership between unmarried couples. But it doesn't stop there, we have also seen an increase in joint ownership of property amongst friends and business partners.
But are we fully aware of the consequences of concurrent ownership?
Concurrent ownership of property can take more than one form. The most common two forms are JOINT TENANCY and TENANCY IN COMMON. Each type is distinguished by the rights of the co-owners.
Usually, the word "tenant" is used to describe the person renting or leasing a property. In the context of concurrent ownership of property, a "tenant" is one of the co-owners of the property.
What is the difference?
With tenancies in common the title to the property is held by two or more persons whereby each hold an individual, undivided ownership interest in the property. The share held by each could be equal or not. Nevertheless, even if the percentage of the interests are not equal, or the living spaces are different sizes, all co-owners have an equal right to use the property.
Co-owners do not need to agree to sell. Each can sell their share separately.
With joint tenancies each co-owner holds an equal share and interest in the property.
Right of Survivorship
The right of survivorship determines what happens to a certain type of co-owned property when one of the co-owners dies. It is the main difference between joint tenancy and tenancy in common.
The right of survivorship does not apply to tenancies in common. In tenancies in common the death of one co-owner shall have the effect of transferring the rights of the deceased tenant in favour of his heirs. This means that each co-owner can choose who they want to gift their share in the property to on death. Where the co-owner has put a will in place, whoever is named in the will shall take the interest in the property. Where there is no will in place, the deceased co-owner's next of kin shall take his/her share. Whether there is a will in place or not, upon the death of a tenant in common there must be a grant of probate/letters...