Like all legal fictions, the most common forms of land ownership seem deceptively simple but in fact they can be quite complicated.
Anna Pantelios provides a useful outline of the differences between joint tenancy and tenants-in-common from a conveyancing perspective in her article “Joint Tenants or Tenants-in-Common?” but confusion continues. The legal consequences of getting the form of ownership wrong can be quite dramatic.
The essential differences between 2 of the most common forms, joint tenancies and tenancies-in-common, are these:
- With joint tenants, each joint tenant holds the whole of the land jointly with the other joint tenants. On the other hand, a tenant in common holds a defined share on his or her own.
- A tenant in common can leave his or her interest in the land in a Will. A joint tenant leaves no survivorship – on his or her death, the interest in the whole of the land rests with the surviving joint tenant or joint tenants.
A joint tenancy gives rise to what is known as “The Four Unities”:
- Unity of Possession – the joint tenants all have joint rights to possess the land;
- Unity of Interest – the interest in the land is the same amongst the joint tenants (although each joint tenant is entitled to a separate Certificate of Title, reflecting the joint interest);
- Unity of title – the interest in the land to all of the joint tenants derives from the same document or transaction; and
- Unity of time – The interests of the joint tenants arise at the same time.
Many married couples assume that purchasing property as joint tenants is appropriate. However, this can have a significant impact on estate planning considerations, particularly if the marriage is the second marriage for one or more parties and there are children from previous relationships. Property ownership needs to be carefully considered when preparing a Will. See Bree Burn’s article “Things to Keep in Mind When Making a Will”
In an increasingly uncertain and litigious world, it is very important to appreciate the true and precise nature of the interest in land you are looking to acquire and to make certain that this interest is properly documented and protected from unforeseen events or claims.
For further information please contact Peter on 8362 6400 or email Peter Jakobsen. Join our mailing list to receive updates and advice on current issues.