When couples purchase a property, they may consider whether to own the property in one’s own name or both. This article focuses on two types of co-ownership: tenancy in common and joint tenancy.

It is important to understand the difference between the two terms. Otherwise, one may mistakenly believe that they have half of the property ownership, when in fact they cannot sell their own share independently.

Jump to: Tenancy in Common | Joint Tenancy | Advantages of Joint Tenancy | Disadvantages of Joint Tenancy | FAQ

Tenancy in Common

Each joint owner owns a distinct but undivided share in the property, without interfering with each other.

For example, if a couple each owns 50% share of the property, one of them can sell or transfer their 50% share without the need to obtain the other party’s consent.

In a tenancy in common, the owners can dispose of their respective ownership rights separately. They can decide whether to leave them as inheritance, transfer them to their children, or even sell them to others.

Joint Tenancy

Joint tenancy means that all the co-owners own the whole property together but individually they do not own a distinct undivided share in the property.

A joint owner cannot transfer his share of ownership without the consent of the other co-owners. All joint owners have the right of survivorship, meaning that if one of them passes away, his share of ownership will automatically be divided equally among the surviving joint owners and cannot be treated as an inheritance.

In other words, the ownership of the property will remain among the joint owners until only one joint owner is alive, who can then decide on his own how to handle the ownership.

Let’s say a couple owns a property under joint tenancy. If the husband passes away, the wife is entitled to own the whole property. Even if the husband has a will that specifies the distribution of his assets, the ownership of the property will not be considered as part of the inheritance.

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Advantages of Joint Tenancy

In a joint tenancy, all changes to a property ownership (including transferring ownership) must be agreed upon by all co-owners before they can be approved.

Let’s say a couple’s property is held by joint tenancy. If one of the co-owners wants to transfer his ownership to his parents or financially struggling siblings, the transfer of ownership must be agreed upon by both owners.

It can ensure no rash decision is made by either of the co-owners. If one is concerned about his partner disposing of the property without notice, join tenancy is a preferable option.

According to current banking practice, if one joint tenant passes away and there is an outstanding mortgage, the other joint tenants will not need to reapply for the mortgage or undergo any testing.

Disadvantages of Joint Tenancy

If a joint owner has financial problems and and the lender may want to get the money back by foreclosing the property or filing for bankruptcy against the debtor.

In a tenancy in common, only the share of ownership held by the indebted owner will be affected and sold by the financing company. This kind of property with incomplete ownership is known as “tenant in common property”.

However, in a joint tenancy, all joint owners are treated as owning the entire property. If one co-owner is in financial trouble, all others are likely to share the consequences.

There is no right or wrong answer which type of co-ownership is better. It depends on the relationship between the owners. If you are searching for a property across different neighbourhoods, go to Spacious to discover a wealth of properties listed for sale. 

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