Tenants in common agreement
This co-ownership is for a single purpose - to separate the ownership of property between two or more owners for legal purposes. Use it either to separate out your joint interest or to set down different ownership shares, or both. Examples of situations in which you might use it include: if you are divorced or considering separation, or if you have bought a property with friends. In law, it converts a joint tenancy to a tenancy-in-common. It does not provide a management framework. See below for alternative documents covering management and other arrangements.
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The law on co-ownership of property
In law, the relationship of co-owners of property is either as “beneficial joint tenants” or as “tenants in common”. The term “tenant” has no connection with a tenant under a lease. Under either sort of tenancy, a joint owner can insist on a sale.
Usually, your conveyancer will draw the document transferring your property to you in words that make you “beneficial joint tenants”. That means:
- You own the property equally.
- When you sell, the proceeds will be divided equally, even if one of you has contributed more in the meantime.
- If one of you dies, the other(s) automatically get his share - even if you are divorced or separated, and regardless of what you write in your will.
This document changes that.
Who should use this agreement
This agreement “severs” a joint tenancy, and sets out how the sale proceeds of real property will be split between the owners.
- You may be married or in a relationship, and want to know that if you separate, when the property is sold you will each get out what you have put in.
- You may be a couple, group of friends, brother and sister, or parent and child, buying a house together to get on the property ladder.
- You may be buying for business purposes and simply not want land title registry to show your proportionate shares.
This is a simple agreement dealing only with the legal ownership.
About this tenants in common agreement
This agreement serves two purposes.
First it “severs the joint tenancy”, so that each owner owns an identifiable share. This could be 50:50, or it could be any other ratio. That is legally valid, but will not change pre-existing obligations, for example, who is responsible for repaying the mortgage.
Secondly, it sets out the arrangements for division of the proceeds of sale of the property. Depending on the circumstances, that will be legally binding between the owners, but may not be binding against a third party, like a trustee in bankruptcy.
The agreement enables you to choose the ownership proportions or make arrangements for changing the proportions. For example, you may want a gradual increase in the share of one owner who is paying off a mortgage or parent-lender.
After you have signed this agreement:
- Your shares in the property are separate in law, so that a creditor of one cannot take the share of the other too.
- When you sell, the net proceeds are divided in the shares you have agreed.
- If one of you should die, that person’s share will pass according to his will or intestacy.
This document does not contain arrangements for managing your property because it may become a public document. We cover management arrangements very thoroughly in other documents. Have a look at:
Joint ownership agreement: holiday property regulate the share ownership and use of a house, flat or other property for holiday occupation among different owners
Joint ownership agreement: residential property to record the joint ownership of a single residential property. Where all the owners occupy the property at the same time.
Cohabitation (living together) agreement sets out living arrangements, such as responsibility for bills.
Agreement features and contents
- Suitable for situations where there are up to four owners (the maximum allowed by law)
- Provides for a joint tenancy to be ended and changed to a tenancy in common
This document was written by a solicitor for Net Lawman. It complies with current Australian law.
What other customers thought
Average customer rating
By Michael Lister 19 August 2016
By Jennifer Middleton 16 May 2016
Firstly, the price (only $19) for a legal document.
Secondly, how comprehensive the guidelines were.
Lastly, the ability to edit the document.
By Mike Kulas 18 January 2016
By Geoffrey Beresford 15 December 2015
I found the document well priced, I appreciated the helpful guide and found completing the document very easy. I would highly recommend this service.
By Hall Alexandra 20 November 2014
The document is easy to understand and is set up to be user friendly. The website is great and navigating to want you want is simple. Very happy with my purchase, thanks Net Lawman.
By Amy Leo 29 September 2013
I needed this agreement and purchased it from this site because it was the cheapest available, by like $100.00. I am extremely happy with the document, easy to read, easy to understand, well set out and great explainations for us non-lawyer average humans.Thanks a lot for your service, I know, where I will be going for my next legal document requirements
By Quentin Jones 27 November 2016
The document was just what I needed, the process was quick and easy, the price was OK, and it was straight-forward to edit and use it. This is the first time I have used any such service, I think it will be a winner.
(BTW - I would suggest using .RTF files - they are not proprietary to Microsoft, open on any PC, and handle the usual formatting.)
Net Lawman responds 05 December 2016
rtf and other formats are available on request. We have tried standardising on rtf but some people do not recognise the suffix and do not understand what it is.
By Brian Smith 31 August 2015
Maybe I expected too much. I had hoped there would also be a larger list of general items which would nail down potential trouble spots eg.
- If one Owner dies, and Beneficiaries want out - how is the purchase price of their share determined? Who determines property value?
- First purchase offer to other Owners? Or can they sell to anybody?
- There could be a number of Beneficiaries, with some wanting out, and others to remain in.
- How would Owners decisions be made - ? by majority vote.
There are probably other relevant items. The document forwarded is clear and brief.
Regards Brian Smith.
Net Lawman responds 03 September 2015
This is a very simple document with a very simple purpose. We think I is fair to expect that a buyer knows what he wants and how ithe change will affect him. This is not a document about life management. We have others that are.
By Harry Audus 22 August 2015
"In general, the document is clear and covers all the points we as the parties expect to make (other than those we need to make in our wills).
I would be happy to recommend Net Lawman to my friends."
By Elaine Runge 29 June 2015
I thought the material was within my knowledge. Understanding the concept of Tenants In Common.l Reading the material has helped me understand more so than listening to people. Yes I would recommend this website to others.
By Glen Lewis 22 June 2013
The only query I have is whether the parts printed in blue are optional or not? e.g. the need for a life insurance policy? House insurance, yes, but why life?:
Net Lawman responds 03 July 2013
Thank you for your custom at Net Lawman.
The blue markings we use:
1- the areas where some real information to be inserted or provided by the user, for example "the licence fee is [amount] to be paid on [25th December, 2013]
2- where the user to select between two or more than two alternative paras, we us "OR" for such paras
3- where the information the draftsman provides but may not be relevant to you. So keep only if this is relevant to you otherwise delete. Usually we guide about this in our para specific notes at the end of the document. The templates are of generic nature and all clauses may not be relevant to you, the draftsman try to cover 99% situations.
Please do let me know if you find any question. we shall be very happy to help.We look forward seeing you again at Net Lawman.
By DAVIDE DI FLORIO 31 March 2016
I found the document useful but too basic to construct a comprehensive agreement between individual share holders of a property.
Net Lawman responds 03 April 2016
We do make clear on the info page for this doc that it deals only with legal status of the parties. We offer the document you really needed as a shared ownership document, which includes all the management issues you were probably looking for.
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