Tenants in common

Maintain your share of your property

When spouses/de facto couple purchase real property in Australia, conveyancers almost always register both purchasers’ names on Title as holding the property as joint tenants instead of as tenants in common.

If you and your spouse/partner hold Title of the real property as “joint tenants”, when one person passes away, the deceased’s interest automatically passes to the other person, the survivor – this is called the “right of survivorship” i.e. the person who survives the other will benefit from the deceased’s interest.

There are situations where this arrangement may not be ideal. For example, if spouses separate and one spouse passes away prior to a property settlement being finalised, then the surviving spouse automatically benefits from the deceased’s interest, even though they are separated and the deceased may not have wanted his/her share to pass to their former spouse. Of course, these are actions that can be taken in the Family Court by an Executor.

There is another option. If you own real property with someone else, you can instead be registered on Title as “tenants in common”.

Let’s take a closer look at both ownership options:

1. Tenants in common:  This type of ownership allows you and your purchasing partner to split ownership of the property into shares. For example, “as tenants in common in equal shares” or “as tenants in common as to one third share” and the other person may have two thirds share of the property. You may even split them into 100 shares and one person may own 40 shares out of 100 shares whereas the other person would own the other 60 shares.

If you are registered on Title as “tenants in common”, you may bequeath your share of the property to anyone you like in a Will.

2. Joint Tenants: If you own the real property with a spouse/partner, you are most likely registered on Title as “joint tenants”. Each joint tenant owns 100% of the real property. If one person dies, the deceased’s interest automatically passes to the surviving joint tenant. You cannot bequeath your interest in the real property in a Will.


Our advice

  • We recommend that everyone who purchases real property register their interests on Title as “Tenants in common” and make a Will. This action protects your interest in the property and allows you to bequeath your interest in the property to anyone you like.
  • If you are separated/applying for a divorce, we are able to assist you by executing a Transfer of Land, transferring your interest your property from being registered as “joint tenants” to “tenants in common”.
  • If your children are purchasing property with their spouse/partner/friends, pass on this newsletter to them!

Call us today to know your options.

This article provides information that is general in nature and is not a substitute for legal advice.