Tenancy in Common

Tenancy in common allows multiple people to own a property together with specified shares — for example, one person might own 60% and another 40%. Unlike joint tenancy, there is no right of survivorship. When a tenant in common dies, their share forms part of their estate and is distributed according to their will (or the Administration Act if there is no will).

This ownership structure is common among business partners, friends buying together, family members contributing unequal amounts to a purchase, and people in blended families who want their share to go to their own children rather than their co-owner.

Each tenant in common can deal with their share independently — they can sell it, mortgage it, or leave it to whomever they choose. However, in practice, selling a share of a property on the open market is difficult, so co-owners usually have an agreement about what happens if one person wants to sell.

If you're buying as tenants in common, it's essential to have a co-ownership agreement (sometimes called a property sharing agreement) drafted by a lawyer. This should cover how costs are shared, what happens if one party wants to sell, how disputes are resolved, and what happens if one owner can't meet their financial obligations.

Without a co-ownership agreement, disagreements can escalate to the Property Law Act 2007 process for sale or partition, which is expensive and stressful for everyone involved.

The ownership structure and share proportions are recorded on the certificate of title from LINZ. When purchasing, your lawyer will register the appropriate shares. Make sure the shares accurately reflect each party's financial contribution or whatever arrangement you've agreed upon.