When two or more people buy property together they need to consider what type of land ownership, or tenancy, they wish to have. In New South Wales, there are two types of tenancy, joint tenants and tenants in common. This question is important because there are legal and practical differences between a joint tenancy and tenancy in common.
Joint tenancy is commonly used by married couples, de facto partners and others in similar relationships. Under a joint tenancy, both people together own the whole of the property. The law of survivorship applies which means on the death of one joint tenant that person’s interest in the property automatically passes to the surviving joint tenant regardless of the provisions in a will. A joint owner’s interest in a property does not form part of their estate and is not available for distribution to the beneficiaries of their will.
Tenancy in common
A tenancy in common is most suitable when the buyers are friends, business associates or relatives and each of them has contributed money to buy the property. Married couples and de facto partners can also own property as tenants in common and this may be the preferred way for a couple to own property where there are children or prior relationships whose interests have to be protected.
Tenants in common can own the property equally or in some other share, usually reflecting how much money each one contributed. For example, if three people buy a property, one (Buyer A) pays half and the others (Buyers B and C) pay a quarter each. In this example, they could own the property as follows:
A as to 1/2 share
B as to 1/4 share, and
C as to 1/4 share
as tenants in common.
A tenant in common can leave his or her share in the property to anyone. This requires a will, so all tenants in common should have a will. If a tenant in common dies without a will that person’s interest in the property will pass in accordance with the rules of intestacy.
A tenant in common also has the right to sell, mortgage or lease their share in the property without the agreement of the other owners. If the owners cannot agree between themselves, an owner can apply to the Supreme Court for an order to sell the property.
Severing a Joint Tenancy
A joint tenant cannot leave his or her share of the property to anyone else in their will. However, a joint tenant can sever the joint tenancy to make a tenancy in common. It is not necessary to get the other owner’s agreement to do this but they will be given notice and they will be given the opportunity to object. If they do not object, the joint tenancy is severed. Afterwards, both owners can state in their will who receives their share of the property. This is useful for a person leaving a marriage or de facto relationship who no longer wishes his or her partner to become the owner of the whole of the property in the event of death.
Adding a partner’s name to the title
If you own a property by yourself, you might want your partner’s name to be put on the title, though there is no requirement to do so. Normally, you would have to pay stamp duty on the transfer but if the property is your family home, you may be entitled to an exemption from stamp duty on the transfer.
What if I’m not sure how my property is held?
If you own property, you might be unsure of the ownership details. A title search will confirm the current owners of a property and the tenancy in which the land is held. Please contact us if you would like us to carry out a title search of your property.
(LPI fees are payable for title searches)
The search will show whether you are joint tenants or tenants in common. It will also show the name of anyone else with a registered interest in the property, such as a mortgage or a lease.
You might find from the search that you are not recorded as an owner, even though you have paid some of the money for the property (including mortgage repayments). If so, you may want to register a Caveat on the title to the property to protect your interest in the property. A Caveat will stop the property from being sold without your knowledge. If the owner objects to the Caveat, you might have to go to Court.
Changing your name
Many women use their husband’s surname when they get married. This is a custom, not the law. If a woman wants to keep using the surname she had before marriage, she is legally free to do so.
Also, a woman can choose to use her surname for business and use her husband’s surname at other times. If there is a breakdown in the marriage or relationship (or for any other reason), a woman can start using a new name or go back to her former name.
If a woman uses her husband’s surname, a marriage certificate is sufficient proof of the change. Sometimes it is necessary to register a change of name at Land and Property Information.
Changing your name on land title records
If you change your name, you do not have to change the ownership records at Land and Property Information until you sell, mortgage or lease the property.
If you are selling the property, you will need to make a statutory declaration and give this to the buyer.
In general, you should obtain advice if:
- your marriage or relationship breaks down;
- your partner dies, whether they were a joint tenant or a tenant in common;
- you want to change from a joint tenancy to a tenancy in common.
If you would like more information on land ownership and your rights, please contact Davis Legal Property and we would be happy to assist.