Tenants in Common: Meaning and Definition
“A form of co-ownership of property where two or more persons hold distinct, defined shares in the property, which can be unequal and can be bequeathed via a will.”
Tenants in common is a legal method of co-owning real estate in Australia. Unlike joint tenancy, co-owners who hold property as tenants in common own separate and distinct undivided shares in the land. These shares do not have to be equal; for example, one party can own 70% and another 30%. This structure is common among business partners, family members co-purchasing, and couples in second marriages.
From an estate planning perspective, there is no right of survivorship under a tenants in common title. If one owner dies, their share does not automatically pass to the surviving co-owner. Instead, it forms part of their deceased estate and is distributed in accordance with their will or intestacy laws under the Succession Act 2006 (NSW). This makes it a critical title consideration in probate property sales and divorce settlements governed by the Family Law Act 1975 (Cth), requiring conveyancers to carefully verify ownership shares before preparing contracts of sale.
Frequently Asked Questions about “Tenants in Common”
What does "Tenants in Common" mean in Australian property?
A form of co-ownership of property where two or more persons hold distinct, defined shares in the property, which can be unequal and can be bequeathed via a will.
How does "Tenants in Common" apply when selling a house privately in NSW?
When selling a property privately in New South Wales, understanding "Tenants in Common" is important because it affects your rights, obligations, and the overall sale process. We recommend reviewing the relevant NSW legislation and consulting a licensed conveyancer for advice specific to your situation.