Property Co-Ownership: What is the difference between joint tenancy and tenancy in common?

When purchasing property together with another person or persons, whether it be your spouse/partner, sibling, friend or business partner, it is important that you consider the way in which you wish to co-own the property. There are two types of co-ownership: joint tenancy and tenancy in common.

What is joint tenancy?

Joint tenants together own the whole property, as each joint tenant has equal ownership and interest in the property. Commonly, joint tenants are spouses or people in long-term relationships, however this type of co-ownership may be appropriate in other circumstances.

What is tenants in common?

When two or more people own property as tenants in common, each person owns a defined share in the property. The shares owned by each person can be equal or unequal. For example, two friends may each own a 50% share, or one may own a 70% share whilst the other owns a 30% share.

Friends, business partners and people with adult children entering second marriages are some examples of where ownership as tenants in common is likely to be appropriate.

What is the difference and why is it important?

Whilst both classifications of ownership give each co-owner proprietary rights and a share of the property, one of the main differences between the two is what happens when one of the co-owners die.

When people own property as joint tenants, upon the death of one of the joint tenants, the right of survivorship applies and the interest of the deceased automatically passes to the surviving joint tenant/s, regardless of what the deceased’s Will states. This is because the property does not form part of the estate of the deceased.

On the other hand, when one of the co-owners of a tenancy in common arrangement pass away, their interest in the property does not automatically pass to the surviving co-owners, and instead forms part of the deceased’s estate and will be distributed in accordance with the deceased’s Will, or the laws of intestacy if there is no Will.

Author: Meg Fritsch

Published: 30 April 2019


The information in this article is general in nature and is not to be relied upon as legal advice. As always, we recommend you seek thorough legal advice to consider your own circumstances and determine whether the information contained in this article is applicable to you.  This article is current as at the date of publishing but will not be updated as circumstances change.