Joint Tenant or Tenants in Common

What is the difference between joint tenant and tenant in common?

If you purchase property with another person or persons, you will need to nominate the form of tenancy that you wish to purchase under, that is, whether you are purchasing as a joint tenant or as a tenant in common.

There’s a considerable difference, and it’s very important to get it right when you purchase the property.

You will need to make an informed decision, relying on advice from your legal representative and possibly also your financial advisor.

What does joint tenant mean?

Owning property as a joint tenant means that you own the property with others equally, your ownership is indivisible unless you sever the joint tenancy or a court intervenes and divides or severs ownership.

On the death of a joint tenant, the other joint tenant/s becomes entitled to the deceased’s holding in that property automatically. Generally, it’s unnecessary for the deceased to devise their share or ownership in a will to the surviving joint tenant/s.

What is the meaning of tenant in common?

Owning property as a tenant in common however, means ownership is held in distinct shares. A tenant in common owner can be an owner in a property in any particular share from as little as one percent, to 99% share.

An owner as a tenant in common can devise their respective share in the property to their respective beneficiary in a will, which is not the case as a joint tenant.

Owning the property as a joint tenant as opposed to a tenant in common also becomes relevant in the case where you wish to refinance or mortgage the property.

Company Title

When you buy a property under Company Title, what you purchase is an entitlement to a share in the company that actually owns the entire building. In other words, the company that owns the building – usually a block of flats, is specifically established or constituted to do so.

Unlike the torrens system of recording ownership of property on a land holding register (administered by NSW Land Registry Services) your ownership in a Company Title property is evidenced by a (paper) Share Certificate entitling you to a parcel of shares in the company itself.

The register of owners and shares is kept by the company or the company’s property manager. The certificates are issued by the company itself.

There is a lot of misunderstanding about Company Title ownership. However, there are a lot of similarities with strata title ownership. Lending institutions will usually keep the original Share Certificate as security for any loan.

Company title properties are not necessarily cheaper than Strata Title properties. Company Title pre-dates, strata title. Company title apartments can be of an older grander style of property which some people might prefer.

Some would say that the committees of Company Title properties are more attentive to the management and day-to-day maintenance of the building.

Transfer of Company Title ownership goes by way of a contract. Stamp duty is payable on the Transfer of shares based on the value of the shares. Duty is calculated in exactly the same way as on the transfer of a strata title property.

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