Many people who own a home may be unaware of the effects and implications of how they appear on the title document. It is important, when purchasing a property, to consider your unique circumstances when deciding how to record ownership. There are two main types of ownership – joint tenancy or tenants in common.
If your lawyer has not specifically asked you the question of ownership you will most likely be recorded on the title as joint tenants. If this is the case, using the example of a married couple, your names would appear on the title as, for example, “Debbie Jones and Brian Jones”. The effect of owning a property as joint tenants is that, if either one of you dies, that share automatically passes to the other regardless of what your Will may provide. Additionally, decisions affecting the property must be made together.
The alternative is to own a property as tenants in common. In this case, using the example above, your names would appear on the title as “Debbie Jones as to a one half share and Brian Jones as to a one half share”. The main point of difference is that, under this type of ownership, your half share is disposed of on your death according to what your Will provides. Another good reason to have Wills and to keep them up to date.
Couples should carefully consider how they wish to be recorded on the title and who they wish to benefit down the track. This can be especially so in second marriages or situations where one party is bringing substantially more to the relationship.
It is important to also consider that the law currently enables one of the registered owners, i.e. for example Debbie, to transfer the property ownership from joint tenants to tenants in common without the knowledge of her husband Brian. If Debbie had a Will that provided that, on her death, her half share was to be transferred to a person(s) other than her husband, this could pose some serious issues for her husband when she died.
How a property is “owned” is sometimes overlooked or the importance negated. It is an issue you may not have considered before. If you have any queries or concerns as to how you are recorded on the title to your home the team at Sharp Tudhope can answer any queries you may have.
N.B This article is of a general nature, and should not be relied upon as a substitute for specific legal advice. Should you wish to discuss anything further, please contact Robyn Williams at Sharp Tudhope Lawyers on 07 578 2149