When property is purchased by two or more people, it is important to consider the “manner of holding”. That is, whether the property will be held as joint proprietors or tenants in common.
When property is held as joint proprietors, if one of the owners dies, the property will automatically pass to the surviving owner(s). The property therefore does not form part of the deceased person’s estate and cannot be left to another person in the deceased person’s Will. This is called the right of survivorship. Married or de facto couples will often own their property as joint proprietors.
When property is held as tenants in common, two or more people own their own share of the property. The property can be owned in equal or unequal parts to suit your circumstances. For example, if the property is owned by two people as tenants in common, each person may own a 50 percent share in the property or alternatively, one person may own a 99 percent share and the other person may own a 1 percent share. There is no right of survivorship for property held as tenants in common. This means that the deceased person’s share in the property does not pass to the surviving owner(s). Therefore, a person’s share in the property can be left to another person in their Will.
It is important to give consideration to which form of ownership best suits your circumstances. If you are considering purchasing property and have any queries or would like further advice, please arrange an appointment with one of our experienced Property Lawyers.