I was recently catching up with a friend of mine who is about to buy a house with her boyfriend. She wanted to know what was meant by a joint tenancy, and whether or not this was the best approach for her to take. Co-ownership of land is by no means uncommon, however although the differences between forms of co-ownership are marked, they are still not something widely appreciated by property owners. A joint tenancy means that both co-owners own all of the land. It arises where land or an interest in land is conveyed to two or more people. Section 61 of the Land Transfer Act states that there is a presumption of joint tenancy where two or more owners of land are jointly registered. The presumption of joint tenancy can be displaced if words of severance are used in the transfer of land, resulting in a tenancy in common. Words of severance can be as simple as ‘equally’, ‘to be divided between’ or ‘to A one third and to B two thirds’. Under a tenancy in common, each person has the right of possession of the whole of the land, but they only own their distinct share. For example, if a piece of land was conveyed equally to two people (which it does not have to be), then both of those people could possess the land, but each of them would only own 50%. Now, this difference may seem trivial on paper, but the choice between these two options could affect who will inherit your property when you die, or even what your fellow co-owner is able to do with your land. Joint tenancy holds a right of survivorship, so for example, if a husband and wife held a joint tenancy over their land and the husband was to die, then his interest would automatically vest in the wife. Tenancy in common, on the other hand, has no right of survivorship; if one of the owners dies, their share of the property will pass to whoever the deceased provided for in their will. People who possess land under a tenancy in common can deal with their separate share of the land as they see fit, e.g. take out a mortgage or even transfer their share, whereas under a joint tenancy neither owner can mortgage their interest without agreement from the other owner. It pays to keep this in mind when purchasing property with someone under a tenancy in common – what will happen if you fall out with each other? The conversation with my friend struck me as one of those circumstances where a basic knowledge of the law can be really useful in everyday situations. She hasn’t decided which option she prefers yet, but at least she’s aware what the options mean.
By Chris Patterson