Tenancy in Common
A form of co-ownership where two or more people own a property in defined shares that can be equal or unequal, and each owner's share passes through their will when they die.
What is a 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.
Why It Matters for Due Diligence
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.
How to Check
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.
Frequently Asked Questions
Can I leave my share to someone specific in my will?
Yes — that's one of the key advantages of tenancy in common over joint tenancy. Your share forms part of your estate and is distributed according to your will. This makes it suitable for blended families or situations where you don't want the co-owner to automatically inherit.
Do tenants in common need to own equal shares?
No. Shares can be any proportion — 50/50, 70/30, or even split among multiple owners. The shares should typically reflect each person's financial contribution, but you can agree on any arrangement.
Related Terms
Joint Tenancy
GlossaryA form of co-ownership where two or more people own a property together with equal shares, and if one owner dies, their share automatically passes to the surviving owner(s).
Certificate of Title
GlossaryThe official legal document registered with LINZ that proves who owns a property and records all registered interests affecting it.
Freehold
GlossaryThe most complete form of property ownership in New Zealand, giving the owner full rights to both the land and any buildings on it.
Cross-Lease
GlossaryA form of property ownership where multiple owners share the freehold of a single piece of land and lease their individual dwellings from each other.
Fee Simple
GlossaryThe legal term for freehold ownership — the most complete form of property ownership available in New Zealand.
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