Survivorship – Knowing Your Rights As A Joint-Tenant Or Tenant-In-Common
Many married (and unmarried) couples own their property jointly. Depending on the way in which this property ownership is arranged, this may fall into one of two categories – either a joint tenancy, or what is called a tenancy in common.
Determining which of these categories you may fall into if your partner passes away makes all the difference in knowing what to do next.
Tenancies In Common
With a tenancy in common, each tenant owns an individual ‘share’ of the property. Often on Certificates of Title, this may be expressed in numerical terms to show the varying proportions of ownership – for example, one person in a relationship may have 60 shares of the property, with the other only 40. When one person passes away, their proportionate ‘interest’ in the property can be bequeathed to another person or otherwise form part of his or her Estate.
Where a tenant in common passes away without a Will, however, the rules of intestacy apply. In many cases, the tenants in common are in a relationship of some sort, and the Courts are eager to recognise the presumption that a person in a long-enough relationship would want to provide for their surviving partner.
In light of this recognition – and with some exceptions – in most cases the surviving partner of an intestate will inherit the whole of the property. This process, however, does not occur automatically, and will require either an appointed administrator or the deceased’s next of kin to lodge an application to obtain ‘letters of administration’ to deal with that part of the property.
With a joint tenancy, two people together own the whole property. If one joint tenant dies, the surviving joint tenant will take ownership of the whole of the property – in effect, when a joint tenant dies, his or her interest in the property is transferred to the surviving tenant. Although this transfer is well established in the law (often referred to as the ‘doctrine of survivorship’), it is not an automatic process.
An often-quoted maxim in the law of property is that legal title is ‘good against the world’ – this means that the person with the best and clearest claim to land can defend his or her ownership of that land against any other claim in the world. In Australia, in all but extremely rare cases, a title held by the relevant state or territory titles office will be considered the best and clearest claim to a property.
Therefore, despite the ‘immediate’ effect of transfer when one joint tenant passes away, it is crucial that the surviving joint tenant take the necessary steps to amend their Certificate of Title. This is done through a ‘survivorship application’.
Compared to the letters of administration for tenants in common, a survivorship application is a relatively inexpensive and simple task that requires only four things:
- 1. An application by the surviving proprietor of the property;
- 2. The Certificate of Title;
- 3. A statutory declaration by the person making the application which details how they became aware of the death of the proprietor; and
- 4. Evidence of the applicant’s identity.
While the fees vary in Australia’s different states and territories, this application should cost no more than a few hundred dollars. Where there is a mortgage on the title, the bank may sometimes charge an additional fee for a temporary ‘release’ of a title in order to effect the changes and have the new ownership registered.
Naturally, the death of a loved one – particularly a partner – can be an emotionally taxing time, and any Estate Professional will be more than capable and willing to perform these tasks for you if you are unable to do so yourself.