Buying a property is not always a straight forward affair, especially where there are more than one buyer as you have to choose between joint tenants and tenants in common. When two or more people own a property as either joint tenants or tenants in common, or a combination of both, each of the individuals own particular share of interest in the property. While joint tenants have a lot of similarities to tenants in common, it is important to understand the implications of both.
What is tenants in common?
When property is purchased as tenants in common each proprietor can own equal or unequal shares in a property. Take for instance, there are three owners; owner A, owner B and owner C to deal with. Both owner A and owner B owns 25% of the property, whereas owner C has 50% ownership. There are lots of different variations to tenants in common which can be tailored to suit your individual needs.
What is joint tenancy?
Two or more Joint tenants hold an undivided equal share of property. The terms of joint tenancy or tenancy in common or even a combination of both are depicted on the title deed.
So what is the difference between tenants in common and joint tenants?
The main difference between the ownerships is what happens to the property when one of the owners passes away. When a property is owned by the joint tenants, the interest of a deceased owner will be automatically transferred to the remaining owners. For an example, if three joint tenants own a property and one of them passes away, then the remaining two will become joint tenants owning one-half share of the property. This is known as the right of survivorship.
Tenants in common don’t have the rights of survivorship. The Will of a deceased proprietor ensures their interest in the property will be distributed and then transferred, according to the Will, to the Executor and/or beneficiaries of the Will. Probate must first be obtained on behalf of the deceased proprietor.
If the above-mentioned information is not enough, you can contact Longford Legal and speak with an experienced property lawyer.