When purchasing a freehold property, if there is more than 1 Purchaser, you can elect to holder the property as either Joint Tenants or Tenants in Common. The key difference between them lies in how they handle ownership shares, survivorship, and the transfer of their interests:
Joint Tenants (Joint Tenancy):
Equal Ownership: In a joint tenancy, all owners have an equal share of the property. This means that if there are two joint tenants, each has a 50% interest in the property, and if there are three, each has a one-third interest, and so on.
Right of Survivorship: One of the defining characteristics of joint tenancy is the right of survivorship. This means that if one joint tenant passes away, their ownership share automatically transfers to the surviving joint tenant(s) without going through probate. The property continues to be owned by the surviving tenant(s) in equal shares.
No Ability to Will Ownership: Joint tenants cannot pass on their ownership shares to someone in their will. The property automatically goes to the surviving joint tenant(s).
Tenants in Common (Tenancy in Common):
Unequal Ownership: In a tenancy in common, each co-owner can hold a different ownership share in the property. For example, one owner might have a 60% interest while another has a 40% interest. These ownership shares are typically determined at the time of purchase and can be unequal.
No Right of Survivorship: Unlike joint tenancy, tenants in common do not have a right of survivorship. If one tenant in common passes away, their ownership share does not automatically transfer to the other co-owners. Instead, it becomes part of their estate and is distributed according to their will or the laws of intestacy.
Ability to Will Ownership: Tenants in common have the flexibility to bequeath their ownership share to a specific individual or entity in their will. This allows for greater control over the disposition of their share after their death.
In summary, the primary difference between joint tenants and tenants in common is the treatment of ownership shares, survivorship, and the ability to transfer ownership interests. Joint tenants have equal shares, a right of survivorship, and cannot will their shares, while tenants in common can have unequal shares, do not have a right of survivorship, and can freely will their ownership interests. The choice between these forms of ownership should be made carefully, considering the goals and intentions of the property owners. Legal advice may be necessary to establish the desired form of ownership.