Do I own my property as Tenants in Common or Joint Tenants and why does it matter?

Understanding the difference between tenants in common and joint tenants is critical for making informed decisions about property ownership and estate planning. Whether you are purchasing property with others or planning how your property will be distributed upon your death, it’s important to consider how these two forms of ownership align with your wishes. 

Tenants in common is where two or more people own separate shares in a property.  Each person has a defined percentage of ownership, which may or may not be equal.

Key Features of Tenants in Common:

• Ownership Shares: Each co-owner can have a different percentage of ownership in the property. For example, one person could own 60% of the property, while another owns 40%.
• No Right of Survivorship: If one of the tenants in common dies, their share will be distributed according to their will or, if no will exists, according to the laws of intestacy. 
• Transferability of Shares: Tenants in common have the ability to sell or transfer their share of the property to others without the consent of the other co-owners, unless there is an agreement to the contrary.

Joint tenants is where people own a property jointly and when one person dies, their share of the property automatically passes to the survivor, rather than to the deceased’s estate.

Key Features of Joint Tenants:

• Equal Ownership: All owners hold equal shares in the property.
• Right of Survivorship: If one person dies, their share of the property automatically passes to the survivor, bypassing the deceased’s will or intestacy laws. This can have significant implications for estate planning.
• Inability to Transfer Shares Without Consent: Joint tenants cannot transfer or sell their share of the property without the agreement of the other owners. If one joint tenant wants to sell their share, they are required to sever the joint tenancy to convert the ownership into tenants in common.

Which Option Is Right for You?

The choice between being tenants in common or joint tenants depends on your specific goals and circumstances. Joint tenancy is typically favoured by couples or family members who want to ensure that the property automatically passes to the surviving co-owners. It is also ideal when the owners share equal interests and wish to secure the property for the co-owner in the event of death.

On the other hand, tenants in common is often used when co-owners have unequal contributions to the property or when they want to pass their share of the property to someone other than the surviving co-owners. 

Consulting with a legal professional can help you choose the best option for your circumstances and ensure that your property is passed on according to your wishes. Contact our office for a no-obligation consultation for further information.