FROM THE BLOG

In preparing the transfer of land you will be required to set the division of ownership of the property which can either be a joint tenancy or tenants in common, each of which have different legal and financial effects on the rights of the owners should one party pre-decease the other or sell their interest in the property.

As joint tenants, each owner owns an equal share of the property and all proprietors must consent to the sale of any part of the property. Should one party pre-decease the other, their interest in the property is absorbed by the surviving proprietor.

As tenants in common, each owner has an equal right to use and occupy the entire property and you may own the property in unequal shares, for example, 99% ownership to one party and 1% to the other party.

In joint tenancy, a co-owner cannot transfer their share of the property without the consent of the other co-owner. However, in tenants in common, a co-owner can transfer their share of the property without the consent of the other co-owners.

Overall, joint tenancy is often used for married couples or family members who want to ensure that the surviving owners automatically inherit the property when one owner dies. Tenants in common is often used for business partners or friends who want to own a property together but have different ownership percentages and want the flexibility to transfer their share of the property.

In Joint Tenancy, each co-owner is liable for the entire property, including any debts or obligations that are attached to the property. This means that if one co-owner incurs a debt, the creditor can go after the entire property to satisfy the debt. In Tenancy in Common, each co-owner is only liable for their percentage of ownership. This means that if one co-owner incurs a debt, the creditor can only go after that co-owner’s share of the property.

Due to the potential risks associated with tenant in common ownership, a joint tenancy is recommended unless the purchase is part of a business arrangement.