Evolution Lawyers

Joint Tenancy vs Tenancy in Common

Joint Tenancy Vs Tenancy In Common

If you want to own land with another person, you will have option of holding the legal title as either joint tenants or tenants in common. So, what is the difference?

In a joint tenancy, the registered proprietors have shared title to the whole property. They own 100% of the property together. This means that all dealings with the land must be approved by all owners.

Another hallmark of a joint tenancy is the right of survivorship. This is the right of surviving owner(s) to automatically acquire legal title to the land by transmission in the event another owner’s death.

Joint tenancy is the default way that two or more people hold legal title to land (Land Transfer Act 2017, section 47). It will apply unless a contrary intention is expressed in the instrument under which title was acquired.

The most common way joint owners will express a contrary intention is by electing to become tenants in common, in equal or other shares. When two people own land as tenants in common in equal shares, for example, they each own a half share of the property.

Each share of a tenant in common can be dealt with separately and will vest in the estate of an owner in the event of their death. This is why it is particularly important for tenants in common to have wills and proper estate planning measures in place.

Note that while the share of a tenant in common is legally “separate”, a tenant in common is not entitled to any specific share of the physical land, as defined by area or otherwise. The share is more of a way to describe the allocation of legal title, rather than a way to define which parts of the land belong to which owner.

Importantly, we are talking here about legal ownership of land. In most cases, this is based on the land register. Legal ownership is, however, a distinct concept from beneficial ownership. The latter describes the equitable ownership or interests underlying the legal title. That ownership or interest may or may not align with what is recorded on the register.

Where there are two joint tenants on the title, for example, the land register merely creates a statutory fiction that presumes there is also a joint tenancy beneficially. If the joint owners contributed unequally to the purchase price for the property, the Court is entitled to go behind the legal title and find a tenancy in common in equity. There are other recognised exceptions to the presumption.

In general, however, the way joint owners describe their ownership on the title is decisive. This is why it is important to carefully consider whether a joint tenancy or tenants in common holding is appropriate, before the transaction is completed.

If you need more information or advice about joint tenancies or tenants in common, please get in touch with our expert property team by completing the form below.