It’s only logical that people who are either married, in serious long term relationships, or are just looking for an investment opportunity, will consider pooling their resources together in the purchasing of property. At common law, co-ownership of land can either be achieved either as a tenancy in common or via a joint tenancy. Depending on the status of the joint ownership of the land, different rights and duties will arise in relation to each category of property co-ownership.
We should mention, that strata title is also another category of shared ownership of property, however, the primary focus of this article will be on the categories of tenancy in common and joint tenancy.
What is a tenancy in common?
Perhaps the most important aspect of a tenancy in common is that the parties will own a proportionate interest in the property, known as an ‘aliquot’ portion, in law.
For as long as a tenant in common does not interfere with the shares of the other tenants, the person is able to deal with their right to the land in any manner they see fit – which can mean either via a Will or in fee simple.
Although the right of possession (seisin) of the land is shared, this does not mean that the property is:
- physically divided;
- equal in size; and
- if a party holds a majority of the tenancy, this fact will also be reflected in the ownership rights he or she is able to exercise over the common property.
However, it should be highlighted, that an owner of a tenancy in common, does not own the land as such and is only able to alienate their share of the land – rather than the whole of the land.
How does a tenancy in common come to an end?
A tenancy in common can be severed by statute, either through sale or partition as stated in 66G of the Conveyancing Act (NSW) or if the land is vested in its entirety to one of the other tenants.
What is a joint tenancy?
Like a tenancy in common, a joint tenancy can feature two or more owners. However, the biggest difference is, that unlike a tenancy in common, a party to a joint tenancy owns the whole of the land, along with the other joint tenant or tenants. In other words, joint tenants have ‘seised of the entire estate’.
A joint tenancy has no severable share and this can be illustrated via the example of a married couple who own a joint tenancy in land, and if one of the couple passes away, then the surviving spouse will enjoy the right of survivorship, signifying that they will be the sole owner of the property and no longer will have to share the right to seisin.
What are the features of a joint tenancy?
In order to establish the existence of a joint tenancy, the four ‘unities’ must be present, which are:
the unity of possession: all parties to a joint tenancy enjoy a contemporaneous right of the whole property and not just an individual share – referred to as ‘per my et per tout’ or ‘for half and for the whole’;
the unity of interest: all joint tenants hold identical interest in the land, which is the same in nature, extent and duration;
the unity of title: the interest must be conveyed from the same deed;
the unity of time: all interest must be vested at the same point in time.
Issues of categorising a joint tenancy
The categorising of an interest in land as a joint tenancy can be difficult due to the four ‘unities’, and as a consequence, the default position in some jurisdictions is that the co-owners in land, will be regarded as tenants in common, such as s 26(1) of the Conveyancing Act (NSW) which states:
“In the construction of any instrument coming into operation after the commencement of this Act a disposition of the beneficial interest in any property whether with or without the legal estate to or for two or more persons together beneficially shall be deemed to be made to or for them as tenants in common, and not as joint tenants.”
However in contrast, s 30(2) of the Transfer of Land Act (VIC) is one of the jurisdictions which applies the common law presumption of tenancy in common:
“Two or more persons who are registered as joint proprietors of land shall be deemed to be entitled thereto as joint tenants and in all cases where two or more persons are entitled as tenants in common to undivided shares of or in any land, the Registrar may make any necessary recordings in the Register and may create a single folio for the entirety or separate folios for each of the individual shares, and may produce a certificate of title or certificates of title accordingly.”
How does a joint tenancy come to an end?
An action of severance of a joint tenancy can be done either in equity or law, as well as the following ways:
- severance by a unilateral act;
- disposition to a stranger;
- mutual agreement;
- by court order or bankruptcy;
- severance in law;
- declaration of a trust; or
- alienation to him or herself, or a third party.
Although there are many ways in which a joint tenancy can be severed, we probably should highlight one other manner in which a joint tenancy can come to an end: murder. Because a surviving member of a joint tenancy will enjoy the right of survivorship, the law has denied the reward of survivorship if an act of murder has been committed.
Property matters can be complex and anyone who is experiencing any issues related to property ownership, should contact a lawyer who will be able to assist with any inquiries.