Tenants in Common versus Joint Tenants

Property Law: 21 February 2024

Author: Lauren Woolley & Ralph Davies - Our People

You have decided to purchase a property with a spouse, partner, friend, or sibling, or all four of them, what next? One key step is to agree on the ownership arrangement on the title for the property.

The two most common classification where there is more than one person on title are tenants in common and joint tenants. Although both options provide each party with ownership rights and a share of the property, there are important distinctions which need to be considered before settlement occurs.

Ownership via a tenants in common arrangement is similar to owning shares in a company. These shares can be divided between several people with each holding the same number of shares or each holding more or less than the other(s). For example, two tenants in common could own the land in a 50/50 split, 70/30 split or 90/10 split. In the event one tenant in common dies, their ‘share’ of the property is dealt with in their Will (or intestacy rules, where there is no Will) – the other tenant has no automatic rights to ‘inherit’ their share. This ownership structure is often used by friends, siblings and investors.

On the other hand, joint tenants own an equal interest/share in the property, that is a 50/50 interest in the property. In the event one joint tenant dies, their share in the property automatically passes to the surviving person. This ownership arrangement is commonly used by spouses.

There are several factors to consider when purchasing a property with another person (including estate planning, asset protection and tax consequences), and the guidance above only touches the surface and is in no way comprehensive or definitive. Before agreeing to buy a property with another person or people, please seek the guidance and advice of Aitken Partners, as it is a minefield, so to speak.