Joint Tenancy vs Tenants in Common in Canterbury

When two or more people purchase a Canterbury property together, they must choose how they hold their ownership interest. The choice between joint tenancy and tenants in common has significant implications for estate planning, relationship property, and what happens if the co-ownership arrangement needs to change.

Joint Tenancy

Under joint tenancy, all owners hold the property together without separate defined shares. All joint tenants own 100% of the property together. The defining feature of joint tenancy is the right of survivorship: if one joint tenant dies, their interest automatically passes to the surviving joint tenant(s), regardless of what the deceased's will says. Joint tenancy is the most common ownership structure for married couples and civil union partners who want the property to pass automatically to the survivor without going through the estate administration process. It cannot be used for unequal share ownership - all joint tenants hold equally.

Tenants in Common

Under tenants in common, each owner holds a defined share of the property - which can be equal (50/50) or unequal (e.g., 60/40 or 70/30). Each co-owner can deal with their share independently - they can leave it to whoever they choose in their will, sell it (subject to any co-ownership agreement), or mortgage it. There is no right of survivorship - if one tenant in common dies, their share passes according to their will or the intestacy rules, not automatically to the co-owner. Tenants in common is appropriate for friends buying together, business partners, parent-child combinations where the parent has contributed more, or any situation where unequal shares or independent disposal rights are needed.

Relationship Property Implications

The Property (Relationships) Act 1976 governs how relationship property is divided after separation, regardless of how the title is held. For qualifying relationships, the family home is generally relationship property shared equally, even if held as tenants in common with unequal shares, unless a contracting out agreement (pre-nuptial agreement) is in place. This means choosing tenants in common with unequal shares does not automatically protect an unequal contribution from relationship property claims. Always obtain legal advice if you are concerned about protecting unequal contributions to a property purchase.

Changing the Structure

Ownership structure can be changed - from joint tenancy to tenants in common (called severing the joint tenancy) or vice versa - by registering an appropriate form with LINZ. Your solicitor handles this. It is a straightforward process but should be done thoughtfully with legal advice about the implications.

Information from the New Zealand Law Society and LINZ. For general information only - always obtain independent legal advice about ownership structure before purchasing property.