The two ways to hold co-owned property in Queensland
When two or more people buy land together, Queensland law gives them two choices for how the title is held: as joint tenants or as tenants in common. The choice is recorded on the title and has consequences that persist until it is deliberately changed.
Joint tenancy means each owner holds the whole of the property together with the other owners. There are no separate shares. The defining feature is the right of survivorship: when one joint tenant dies, their interest does not form part of their estate and cannot pass under their will. It passes automatically, by operation of law, to the surviving joint tenant or tenants, until one person is left holding the whole property. For a couple who each want the other to receive their interest on death, joint tenancy achieves that result without a will needing to do the work.
Tenancy in common is different in every material respect. Each owner holds a distinct, separately identifiable share. Those shares can be equal or unequal, and they can reflect the actual contributions each person made to the purchase price. When a tenant in common dies, their share forms part of their estate and passes under their will, or, if they have no valid will, under the intestacy rules in the Succession Act 1981 (Qld). A tenant in common can leave their share to whoever they choose, including a person who has no other connection to the property.
Under the Property Law Act 2023 (Qld), where two or more people acquire an equitable interest in property together without stating how they hold it, the default position is tenancy in common rather than joint tenancy. That is a practical safeguard, but it is not a substitute for an express decision.
Why the choice matters: estate planning and unequal contributions
The difference between the two structures is most visible in two situations: when one co-owner dies, and when co-owners have contributed different amounts to the property.
Consider a couple who buy a home together as joint tenants. One partner dies, leaving a will that gives their share to adult children from a previous relationship. The will has no effect on the property at all. The right of survivorship operates automatically and the surviving partner becomes the sole owner. The children receive nothing from that asset.
Now consider the same couple holding as tenants in common. The partner who dies can leave their share to whoever they wish, including those children. The surviving partner does not automatically inherit anything. For blended families, this distinction is fundamental.
Unequal contributions raise a different question. If three friends buy an investment property and one contributes 60 per cent of the price while the other two contribute 20 per cent each, holding as joint tenants gives each an equal interest in the whole. If the 60 per cent contributor dies, their estate takes nothing from the property. Holding as tenants in common in the proportions of their contributions reflects the economic reality and protects each person’s actual investment.
“The right of survivorship operates automatically on a joint tenant’s death. No will can override it. If you want your share to go to a specific person, you need to hold as a tenant in common.” |
Severing a joint tenancy
A joint tenancy can be converted into a tenancy in common. This is called severance, and it can be done by one co-owner without the consent of the other. In Queensland, a joint tenant can sever by transferring their interest to themselves, which the Property Law Act 2023 (Qld) permits, and the change is then registered on the title under the Land Title Act 1994 (Qld). Once registered, the new tenancy in common structure appears on the title.
A joint tenant considering severance should take advice on timing and effect, particularly where a mortgage is involved and where severance may affect the other co-owner’s estate planning. It is worth knowing that a court order appointing a trustee to sell jointly held property does not, by itself, sever the joint tenancy.
When co-owners cannot agree: the court’s power to order a sale
The most difficult scenario in co-ownership is a deadlock: both owners have equal say and one wants to sell while the other does not, or the parties simply cannot agree on how to deal with the property. Queensland law provides a formal mechanism for resolution.
Under the Property Law Act 2023 (Qld), any co-owner may apply to the court for an order in relation to the co-owned property (section 33). The court can order the sale of the property and division of the proceeds, the physical division of the property between the co-owners, or a combination of both (section 34).
The default outcome is sale. Section 35 requires the court to order a sale and division of proceeds unless it considers a physical division, or a combination, would be more just and fair. In deciding that, the court must consider matters including how the property is being used, whether it is actually capable of division, and whether any co-owner has a particular connection or attachment to the property.
Where the court orders a sale, it may appoint a trustee to conduct it, give directions about the terms of the sale and how the proceeds and costs are dealt with, and adjust the entitlements between co-owners to account for amounts one owner has spent on the property beyond their share, such as improvements, rates or mortgage payments. Physical division of land, sometimes called partition, is the less common outcome and is usually impractical for a standard residential property.
These are court proceedings. They involve legal costs, delay and uncertainty, and they should be a last resort rather than a first step. A co-ownership agreement entered into at the time of purchase can address most of the situations that lead to these applications and resolve them privately.
What this means for you
If you are buying with a partner or spouse
Joint tenancy is common for couples who each want the other to take the whole property on death. But it does not suit every situation, particularly where there are children from earlier relationships, where contributions to the purchase are unequal, or where one partner has significant existing assets or debts. A brief conversation with a property lawyer at the time of purchase costs far less than correcting the structure after a dispute or a death.
If you are buying with friends, siblings or business partners
Tenancy in common is almost always the right structure for co-purchasers who are not in a domestic relationship. It lets shares reflect actual contributions, allows each person to deal with their share under their own will, and avoids the right of survivorship applying in a way nobody intended. A co-ownership agreement should accompany the purchase: it can deal with how outgoings are shared, what happens if one owner wants to sell, how the property is managed, and what process applies if the co-owners cannot agree.
If you are already co-owners and the relationship has broken down
The options depend on how the property is held and what is in any co-ownership agreement. In the absence of an agreement, a court application under the Property Law Act 2023 (Qld) is the formal mechanism, but it is expensive and slow. Before going to court, there are usually practical alternatives worth exploring: a negotiated buyout, an agreed sale, or mediation. Advice specific to your circumstances should be sought before taking any formal step.
A co-ownership agreement is the most useful thing you can put in place
Most co-ownership disputes are predictable at the time of purchase. What happens if one owner wants to sell and the other does not? What if one owner stops contributing to the mortgage? What if one owner dies and their share passes to someone unexpected? A co-ownership agreement answers these questions in advance, while the relationship is good and the parties can agree. It does not need to be complex, but it does need to be tailored to the property, the co-owners and the arrangement they have in mind.
Property co-ownership advice Whether you are about to buy with someone else, want to review how an existing property is held, or need advice on a co-ownership dispute, our property law team can advise on the structure that suits your situation and prepare the documents to support it. |
This article is general information only and not legal advice. The rules summarised here come from the Property Law Act 2023 (Qld), the Land Title Act 1994 (Qld), and the Succession Act 1981 (Qld), and can apply differently depending on your circumstances. Contact Fraser Lawyers for advice specific to your situation.
If you would like to discuss your matter, you can book a consultation or call (07) 5554 6116.
