Severance of joint tenancy is a process that converts property co-owners from joint tenants to tenants in common, eliminating the right of survivorship and allowing individuals to dispose of their share in the property as they see fit.
1. Why are there two legal ownership statuses?
Property co-owners can be joint tenants or tenants in common. Joint tenants usually own equal shares in the property and benefit from the right of survivorship should their co-owner pass away. Tenants in common may own unequal shares and retain the right to distribute them to somebody other than their co-owner.
2. Who should opt for joint tenancy?
Joint tenancy is typically associated with people in a romantic relationship who will live together and who intend for their partner to inherit their share in the property.
3. Who should opt for tenancy in common?
Tenancy in common is useful for those purchasing property with friends, family or as an investment, particularly if financial contributions vary. A tenancy in common recognises that the parties may not reside together in the property and that their shares are not bound by the right of survivorship.
4. How do you sever a joint tenancy?
Should people who purchase a property as joint owners wish to swap to tenants in common, this requires a severance of joint tenancy be conducted. Conveyancers such as Parachute Law can assist and expedite the process, ensuring that all interested parties are notified and that the change occurs seamlessly.
5. Do I need a lawyer to sever a joint tenancy?
It is recommended but not mandated. The process is reasonably straightforward and can be performed without legal input. It is common, however, to seek legal advice to ensure that all changes are legally binding, all relevant authorities are notified and that the property title accurately reflects the ownership status.
6. Does a severance of joint tenancy have estate planning implications?
Yes. As tenants in common, your share will be distributed in accordance with your wishes so you should update your estate planning documentation accordingly once the severance of joint tenancy is complete.