Real estate is one of the most valuable assets a person owns during their lifetime. Whether or not real estate passes to the beneficiaries named in your Will depends on the type of ownership.

Sole ownership, joint tenants or tenants in common?

There are different ways to be the legal owner of a property asset. Each form of ownership has different implications when it comes to deceased estates. It is important to understand which applies to you.

Sole ownership means the property is exclusively owned by a single person and no other person has any interest in it. If the deceased person was the sole owner of the property, the asset usually forms part of the estate for distribution in accordance with the Will.

There are two ways of holding joint property. Two or more people owning property can hold it as joint tenants or as tenants-in-common. The type of ownership dictates what happens to the property on the death of one of the joint owners.

Joint tenancy is the more common form of ownership. Ownership as tenants in common can be with two or more people and in equal or unequal shares.

Joint tenancy

Joint tenancy comes with the ‘right of survivorship’. When one joint tenant dies, their interest in the home passes to the surviving joint tenant, irrespective of what is in the deceased person’s Will. The deceased person’s share is not included in the estate for distribution to beneficiaries.

The property will usually transfer to the surviving joint tenant without having to go through the courts. A copy of the death certificate is generally required as proof of the death.

Tenants in common

If the deceased person owned a property with someone as ‘tenants in common’, each owner (or ‘tenant’) owns a portion of the property asset. The ownership need not be in equal shares – it can be split any way the owners agreed on when they purchased the property.

What happens to a deceased estate when a tenant in common dies?

If a property is owned as tenants-in-common, there is no right of survivorship: if one of the joint owners dies, their share of the property does not automatically go to the surviving owner. The deceased owner’s share of the property becomes an asset of their estate for distribution in accordance with their Will (or if there is no Will, in accordance with the laws of intestacy).

What if joint owners’ circumstances change?

Owning property as joint tenants may be preferable for many people. However, difficulties can arise if circumstances change. For example, in the event of a relationship breakdown, a joint tenant may no longer want their share of the property to pass automatically to their estranged spouse or partner on their death.

Can ownership be changed from joint tenants to tenants-in-common?

It is possible to apply to NSWLRS to have the ownership changed from joint tenants to tenants-in-common without the consent of the other property owner(s). Once registered at NSWLRS, a new title search will show the registered owners as tenants in common in equal shares.