Purchasing a house with someone? What is the difference between tenants in common and joint tenant?
If you’re purchasing a property with someone, there are two different types of ownerships to choose from:
1. Joint Tenants
2. Tenants in Common
The type of ownership you choose depends on how you would like your ownership to be transferred upon the death of one of the owners.
Purchasing property as Joint Tenants means that each tenant:
- has an undivided, equally owned interest in the property
- the property cannot be sold without the other person’s consent
- in the event of death, the surviving joint tenant inherits the share of the deceased joint tenant
Purchasing a property as joint tenants is most commonly used by spouses and de facto partners.
Purchasing property as Tenants in Common means that each tenant:
- owns a different percentage of interest in the property
- could sell or transfer their portion of the interest in property to a third party
- in the event of death, his or her share of the property goes to his or her beneficiaries, rather than to the other tenants in common.
Purchasing a property as tenants in common is most commonly used by business partners.
If you are planning on purchasing a property with someone, it is important to understand how your ownership works or more particularly how your interests in the property will be handled if and when you die.