What is ‘the difference between Joint Tenants and Tenants in Common’?

April 26, 2016
Vicki Wisely

What is

‘the difference between Joint Tenants and Tenants in Common’?


Here at Mortgage Choice in Robina, on the Gold Coast, one of the questions we are often asked by people looking for home loans is ‘What is the difference between Joint Tenants and Tenants in Common?’


So what does this mean and what should your choice be?


When you take that exciting step of purchasing your land or property, you will be signing a contract and discussing the legal options with your solicitor.  If there are two or more people involved in the purchase, one question that will be asked is whether you will be ‘Joint Tenants or Tenants in Common’. 


Joint Tenants - is when each party will hold or own equal portions.  If one of the parties dies, the survivor will automatically receive the other parties’ portion. This is the most common way for couples to purchase.


For example:  Andrew and Jane purchase a property in Robina.  They will be contributing equally as they have joint bank accounts and share their financial resources equally.  They decide to sign the contract as Joint Tenants. 


Should Jane die, her half of the property will automatically pass to Andrew.    Should they sell the property and make a profit, they will receive equal portions of the funds.


Tenants in Common – is when each party owns a defined amount or portion of the property.  Should one of the parties die, their portion could be passed on to a nominated person, rather than the other property owner. 


For example:  John and Mary purchase a property in Robina for $400,000.  John has $25,000 deposit and will not be contributing as much to the mortgage but Mary has $75,000 and will be paying a higher portion of the repayments.  They could opt to sign the contract as Tenants in Common attributing a 25% portion to John and a 75% portion to Mary. 


John decides that should he die, in his Will he will pass his 25% portion of the property to his brother and Mary decides to leave her 75% portion to her children.  Should they sell the property and make a profit, Mary will receive 75% of the funds and John will receive 25%.


It’s important to know and understand the difference and talk to your ‘purchasing partner’ about your particular situation before your decide to sign a contract.


When you’re looking for a home loan, speak
with the home loans specialist. Renee Polden, Mortgage Choice in Robina, your
Mortgage Broker on the Gold Coast.

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