When two people decide to invest in property together they may choose to do so as either joint tenants or tenants in common. The choice may be dependent on several reasons, not limited to:
- their relationship, as business partners or family;
- their wishes, to leave the property to family, or to the other joint-owner/s; and
- tax obligations.
Should the owners decide to become tenants in common, this usually occurs as a result of each owner holding an interest in the property in proportions equal to their contributions. Tenancy in common may also exist where the co-owners occupy separate parts of the land for separate purposes. This was seen in the decision ofMalayan Credit Ltd v Jack Chia-MPH Ltd where the two owners each ran two separate businesses on two halves of the land. Tenancy in common is usually established where there is some sort of ‘division’ among the property.
Joint tenancy, on the other hand, is where the owners have equal interest in the property, the land remains at all times a whole property – undivided between the owners, and the property benefits both owners equally.
The difference between joint tenancy and tenants in common may impact a person’s estate and how they can distribute and use assets. It is important to be aware of the legal and financial implications between falling under either category.
If you would like to discuss this topic further, you should contact our property team at Matthews Folbigg on 9635 7966.
DISCLAIMER: This article is provided to clients and readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as definitive or complete statement of the relevant law.