Owning real estate with another party (joint ownership) can have many advantages, but it’s not something you should dive into without understanding the legal implications, especially when life events change your situation.

These questions and answers will help you understand the basics about joint ownership, including some of the terms.

What does the term ‘joint tenants’ mean?

This is when both parties each own the whole of the property. If one party dies, the other automatically gets the deceased owner’s share and therefore owns 100 per cent of the property. This is despite what the deceased person’s Will says.

What does the term ‘tenants in common’ mean?

This is when both parties each own 50 per cent of the property or another proportion (this proportion usually reflects how much money each person has contributed to the purchase). If one party dies, their share of the property is passed on according to the deceased person’s Will. It is not, in other words, automatically transferred to the other tenant.

I am a joint tenant but am thinking of separating. Should I change to ‘tenants in common’?

You should talk to your lawyer about this since it often has advantages you should be aware of. For example, this arrangement enables you to state who you want to receive your part of the property if you pass away. You do not generally have to get the other owner’s agreement to change from joint tenants to tenants in common. And it does not cost a lot of money to make the change.

If I separate should I enter into a new Will?

You should talk to your lawyer. It’s a good idea to enter into a new Will if you’re changing from being a joint tenant to being a tenant in common. In your new Will you can state who you want to receive your part of the property should you pass away.

What if Court proceedings have already started?

If one party has filed an application in the Court seeking property settlement orders, the Family Law Act makes specific provision that the joint tenancy is ‘severed’.  Protection is therefore afforded to a joint tenant who dies after proceedings have begun

TIP

Property is worth a lot of money and you want to make sure you protect your investment and your interests. So don’t shy away from talking to your lawyer about the best agreement for you and make sure you always talk to your lawyer if your life circumstances change.

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