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Unilateral severance of Joint Tenancy

This article discusses the unilateral severance of a joint tenancy:  what it is, when to do it and why and how a joint tenancy can be severed.

But first:  joint tenancy – what is it?

Severing a Joint Tenancy

When you co-own real estate with another person, you need to consider whether the ownership structure will support your needs.

When you co-own real estate with another person/s, you can nominate to hold as:-

  • Joint tenants; or
  • Tenants in common.

The main difference between the two that we are concerned with is – when you own a property with someone as joint tenants, your share of the property will automatically pass to the surviving joint tenant/s on your death.

This means that a co-owner holding as joint tenant, will not be able to bequeath his or her share in the property to a selected beneficiary.  Their share will automatically pass to the remaining joint tenant/s on death.

Who holds property as joint tenants?

Joint tenancy is a common form of co-ownership with married couples.  If one of the spouse parties dies, the property automatically passes to the surviving spouse.

Spouse parties in second marriages, commonly hold property as tenants in common.  This enables them to leave their share in jointly owned property to the children of a prior relationship.

When and why would you need to sever a joint tenancy?

If you wish to leave your share of the property to a person or persons other than the other registered joint tenant, then you should take steps to sever the joint tenancy immediately.  You do not need the other parties permission to do this, and the fees are minimal.

Likewise, if you are separating or divorced, you should consider severing the joint tenancy.   If you don’t, your share in the property will pass to the surviving joint tenant on your death, and this may not be your intention.  If you wish to leave your share in the property to another person/s such as your children, then you should take immediate steps to sever the joint tenancy.

How do you sever a joint tenancy?

Check the Land Titles Office website of your state.

The forms and procedure will differ slightly depending on your state, but it is a simple exercise to download, complete and lodge the relevant form to sever the joint tenancy.

The joint tenancy will then revert to tenants in common.

You do not need the other joint tenant/s permission to sever the joint tenancy.

No stamp duty applies, and the fee is minimal.

Related Articles

Why you should use a Tenants in Common Agreement

Estate Planning and Financial agreements

Joint Tenants vs Tenants in Common