What happens to your co-owned property after you die?
Published 08 Aug 2019
In today's world of seemingly skyrocketing house prices, it's no wonder people are choosing to own properties as joint tenants or tenants in common. This arrangement, however, is not without challenges - especially where inheritance is considered.
How is a property co-owned?
In New South Wales, there are two ways by which someone owns a home: joint tenancy and tenants in common. When choosing to own a property, it's key to consider the implications of either for of ownership and what it may mean for succession and selling down the track.
In a joint tenancy, both people own equal parts of the property. This is a popular arrangement with spouses - either married or de-facto - as a surviving partner automatically inherits the entire property in the event of the other partner's death. Though this may work for couples, some people who enter into joint tenancies as friends or partners may find trouble down the track in succession, as properties owned in joint tenancies cannot be included as part of estate planning.
Leaving a joint tenancy takes a fair bit of time, too. In order to leave the property and forfeit ownership, the exiting party will need to fill out a Unilateral Severance of Joint Tenancy form. Through this document, a tenant can either change the ownership to tenants in common, or take their name off the property altogether. An issue with this form is that it can be lodged without the permission or knowledge of the other owner - where mortgages are concerned, this can leave one party in the lurch if they're financially unstable.
Tenants in common
Owning a property as "tenants in common" means that the buyers have their own shares which they own. This means if they pass away, the shares don't automatically go to the owner, rather parties named in their Will. Tenants in common don't have to own equal shares of a property. At the time of purchase this may not create issues, however, it could create conflict at the time of selling of shares.
If you're seeking to leave a co-owned property or are concerned with how the property will be divided after your death, it's vital to reach out to expert legal professionals to help with the process. The team at Malouf Solicitors are dedicated to helping our clients through their legal issues with full professionalism and support for a favourable outcome. For more information, get in touch with our team.
Please call us on 02 8833 2000 to speak with a lawyer
I would just like to say thank you to Anthony who assisted my son in his matter. He is a first home buyer and was pressured into signing a contract prior to obtaining legal advice. The contract was certainly was not the normal straight forward type. To be able to obtain the help and assistance he did from Anthony and rescind the offer the next day, was wonderful. We were able to have a stress free Christmas. I am unable to thank him enough for this. My son and our family will be contacting Anthony when we find the next property.
Kim of Sydney