Ask Finder: What’s the difference between tenants in common and joint tenants?

Posted: 1 February 2019 4:00 pm News

Couple outside their new homeIf you're buying a property with someone else, the ownership structure you use could have big implications.

Hi Finder,
I'm buying a house with my partner and trying to decide how to structure the title. What is the difference between tenants in common and joint tenants, and which should I choose?
Thanks,
Madi

Choosing between a tenants in common and joint tenants arrangement can have a major impact should you ever need to sell your property. The two different structures won't matter as much while you co-own the property together, but if you find yourself in a situation where you go your separate ways as individuals, the way you've chosen your ownership structure will make all the difference.

As joint tenants, you co-own the property as a couple or even as a group. The property is considered to be owned in equal shares. In the event that one party dies, a "right of survivorship" exists, meaning the full ownership of the property automatically transfers to the surviving tenant.

This is a common ownership structure for married couples. In the event of a relationship breakdown, a joint tenancy can be ended by one partner transferring ownership to the other, one partner buying out the other's share or by transferring the ownership to a tenancy in common agreement.

Tenants in common can own unequal shares of a property. For example, if one owner has financially contributed more to the property, they can own a larger share. This type of tenancy agreement is often used by people who have already contributed towards ownership of a property before adding another individual to the title.

With tenancy in common, there is no right of survivorship. Upon death, the deceased's share of the property is transferred to their estate and will be distributed according to their will.

The structure you choose will depend upon your individual circumstances. If you want the assurance that, in the event of the death of one partner, ownership of the property will pass to the surviving partner, a joint tenant agreement is best.

However, if you already own a property and are thinking of adding your partner to the title, you might want to consider a tenants in common agreement to reflect the equity you've already built up.

Ask Finder is a regular column where Finder's expert writers answer your questions. All rates and fees are correct at time of publication and we only give general advice.

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