Properties are great assets to have, but that’s not all that it stands for. This new beginning for your residence or commercial business can be such a significant investment to make. Before you get to that achievement of acquiring a property, there’s the purchasing process to get through first.
In recent years, many have decided to purchase property with another person or a group. Couples or siblings both chip in to have a new home. A big friend group decides to get a place all to themselves. This arrangement may be due to the increasing prices on the housing market.
Regardless of the reason though, there’s more than one individual who is buying the property. Two common types of party ownership that everyone interested should be aware of are joint tenancy and tenants in common. Seek legal advice to confirm which would be a more favourable arrangement.
To give you an introduction though, here is a brief outline of the two property ownership types:
Joint Tenancy Definition
Joint tenancy is defined as an arrangement where both purchasers are considered property owners. There may be cases in other property ownerships where each person gets 50% of the household while another party gets 50%, or one party gets a higher percentage because they paid for more. However, joint tenancy recognises that both parties have 100% ownership.
Another clause of joint tenancy is that there can be more than two joint tenants. For example, four people all hold 100% ownership of the property. However, it’s important to take note that if one person in the pool of joint tenants dies, the house isn’t part of the deceased’s estate. Everyone else still keeps 100% ownership due to the right of survivorship.
Tenants in Common Definition
Tenants in Common is defined as an arrangement where both purchasers are considered co-owners of the property. Each party involved is considered to have a certain percentage or share of the property. Tenants in common agreements may have evolved from common property ownership where only one person is claiming to be the owner.
There may be multiple co-owners when it comes to tenants in common, wherein each person can do whatever they want with their share of the property. Some can sell it or give it to someone else. When one co-owner dies, their share isn’t absorbed by the other people under the same land title. Instead, that percentage is counted as the estate of the deceased.
Their Similarities And Differences
The main similarity between joint tenancy and tenants in common is that they are both party ownerships, with each property being held by two or more people. The relationships of those parties both don’t matter, as long as they’re all written on the property’s title.
Joint tenancy doesn’t recognise the concept of shares and co-ownership though, like tenants in common. Another dividing factor is the right of survivorship should one of two or more tenants pass away. Joint tenancy believes that the remaining owners should continue to take ownership. Tenancy in common restricts the other owners from absorbing what was previously claimed.
Going into these party ownership arrangements will require much discussion and paperwork. Seek out more information and legal advice on joint tenancy, tenancy in common and other property ownership types. Discuss to understand everything you and your partner or group are getting into.
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