Co-ownership in Property Law

This assignment delves into the concept of co-ownership in property law, contrasting tenancy in common and joint tenancy. It examines how co-ownership benefits individuals with varying incomes, emphasizing tax advantages for high earners and affordability options for those with low earning capacities. The document also discusses the legal rights and responsibilities associated with each type of co-ownership, including undivided shares and the absence of right of survivorship in tenancy in common.

Running head: PROPERTY LAW
Property Law
Name of the Student
Name of University
Author Note

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Property Co-ownership is a form of ownership where two or more persons share the
ownership of any property. Co-ownership is a way that enables the Australian young people, in
particular, to purchase houses that are available at high prices and is unaffordable for most of the
people. As it is, a known fact that every person dreams of owning their own home which
becomes unattainable to realize owing to the incline in the prices of the house, in particular for
those who are single. While couples tend to pool their resources and incomes to be able to afford
a home, it becomes very difficult for those who are singles as they rely on single source of
income and one savings account1. This inconvenience makes them resort to co-ownership for
purchasing property either with a friend or family member. Where two or more persons take an
estate or interest in land on lease, mortgage, application, transfer such persons are required to
hold the land or property as joint tenants or tenants in common. This clearly signifies that co-
ownership is an increasing trend in Australia, especially for young peoples and those who are
single. This essay discusses about the advantages and the necessity of co-ownership in Australia.
When two or more persons take a property on tenancy, they do it as either joint tenants or
tenants in common. The reasons behind the Australians opting for co-ownership are two-fold.
Firstly, co-ownership provides the Australians, with the affordability to purchase houses that are
otherwise, unaffordable for them2. Further, for people who are purchasing houses for the first
time, it becomes more difficult for they have to put a deposit together. The purchasers who are
young and those who are single and rely upon the single income and savings source, finds it
more difficult compared to those who purchase such homes by way of co-ownership. People
purchasing homes in co-ownership have the option to split the deposit as both the co-owners
1 Duncan, William D., et al. "Property law review issues paper 4–Mortgages, Co-ownership, Encroachment and
Mistake." (2016).
2 Blandy, Sarah. 14th Australasian Property Law Teachers’ Conference 2017 Beyond Sole Ownership Curtin Law
School, Curtin University, Perth, Western Australia 26–29 September 2017 Draft Conference Programme. Diss.
Faculty of Law, University of Southampton, 2017.

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pool together their respective savings that improves the position of the co-owners with respect to
the deposit of the homes.
Secondly, there is a trend of late marriage in Australia, which implies majority of the
Australians usually do not purchase a property or home of their own. Therefore, single persons
may consider their friends and siblings to assist them to achieve an investment property. Another
reason that leads to an incline in the co-ownership is an increase in the borrowing capacity that
is, the persons sharing the ownership gets to split the deposit money which otherwise would have
been paid by the single person purchasing or renting a house3. The advantage of pooling together
the deposit of the house is that it enables the co-owners to join their savings and pay a higher
deposit, which enables them to avoid the expensive mortgage insurance.
As mentioned above that, in order to purchase a property or an interest in land by co-
ownership, the co-owners are said to hold such interest in land or the property as tenants either in
common or as joint tenants4. Tenants in common are a form of tenancy where each person has a
share of the property and they own the property purchase or taken on lease together. For instance
A, B and C purchase a property for $90,000. A makes a contribution of $20000, B makes a
contribution of $30000 and C makes a contribution of $ 40000. Here, the purchase of the
property has been made by way of co-ownership and A, B and C are the co-owners of the
property. The transfer shall be followed as A shall be entitled to 2/9 share; B shall be entitled to
3/9 share and C shall be entitled to 4/9 share being the tenants in common5.
3 Rigsby, Bruce. "A survey of property theory and tenure types." Sydney University Press, 2014.
4Palmer, Jane, et al. "Green tenants: practicing a sustainability ethics for the rental housing sector." Local
Environment 20.8 (2015): 923-939.
5 Altmann, Erika. "Apartments, co-ownership and sustainability: Implementation barriers for retrofitting the built
environment." Journal of environmental policy & planning 16.4 (2014): 437-457.

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Each of the tenants has a right to deal with their part of the property, which is separate
from the others, in their respective ways. This implies that each of these tenants is entitled to
mortgage or sell their part of the property. In case, one of the tenant dies, his part or share of the
property passes in accordance with the instructions made by such deceased person in his will,
which implies that the tenant has specified the organization or person that shall be entitled to the
share of the deceased person with respect to the property.
Joint tenancy, on the other hand, is a form of tenancy where the tenants of the property
are entitled to equal shares of the property irrespective of the fact the number of persons hold the
property as tenants6. On the death of one of the joint tenants, the share passes to the other joint
tenants in equal share in case there is more than on tenant, irrespective of the fact whether the
deceased person actually intended to transfer the share to the other tenant, as may be set out in
his will.
According to section 126 (1) of the Property Law Act 1969 (WA) was applied in
Pateman & Anor v Daw Koh & Anor [2007]7, which stated that there is no right of survivorship
in tenancy in common unlike in joint tenancy8. In Joint tenancy, then rights of survivorship exists
which implies that the interests of the deceased joint tenant shall pass on to the surviving tenants.
It is a fact that there are risks associated with co-ownerships, which might make it
undesirable for several persons. Such risks include affordability for future homes may be
affected because the co-owners are jointly responsible for the taking loans for the deposits of the
house, it often become difficult to arrange for a future loan for another property. This is because;
6 Briggs, Kristie. "Co-owner relationships conducive to high quality joint patents." Research Policy 44.8 (2015):
1566-1573.
7 [2007] WASCA 85.
8 Property Law Act 1969 (WA) (section 126 (1).

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the affordability is assessed on the basis of the income of an individual. If one of the co-owners
wishes to purchase a second property, the bank shall consider the first loan taken by the co-
owner and he shall be solely responsible for the loan. There may be issues pertaining to the sale
of the property, where one co-owner wants to sale off the property and the other owner does not,
and the matter is driven to court, which is not only expensive but also stressful.
Another issue that may arise in co-ownership is the responsibility regarding the
mortgage. If all the co-owners sign the loan document, every borrower is accountable
individually for each other’s debts. Under such circumstances, is any one of the co-owner fails to
make his/her loan payment, the bank shall consider the other co-owners liable for the failure to
make the loan payments9. There is issues related to joint tenancy as well which arises if there is a
default in the categorizing of an interest in land as a joint tenant due to the existence of the ‘four
unites’. Such default may result in change in status of the joint tenants as tenants in common.
Nevertheless, considering the big picture, majority of the Australians merely dream of
having their own house but are incapable of realizing their dream, given the high prices of the
houses or properties. With the help of co-ownership, they get a chance to realize this dream of
owning a house or property10. As discussed above, co-ownership involves two or more persons
owning a property, which reduces the load of a single purchaser to pay the deposit amount. The
purchasers may co-own the property either as joint tenants or as tenants in common. It enhances
the borrowing capacity for the borrowers, which involves splitting of the deposit. It is an
advantage for young persons, singles and those who have low earning incomes. These
9 Roberts, Mike B., Anna Bruce, and Iain MacGill. "PV in Australian Apartment Buildings–Opportunities and
Barriers." Asia Pacific Solar Research Conference. 2015.
10Kraatz, Judy A., et al. "Rethinking social housing: efficient, effective and equitable." Sustainable Built
Environment National Research Centre Research Report 75 (2015).

5PROPERTY LAW
individuals get the opportunity to afford properties that they could not have been able to
purchase property.
From the above discussion, it can be inferred that it is equally beneficial for those who
have high-income capacity as they become entitled to have great tax benefits on a property and
enables them to reduce the taxable income or become entitled to receive a greater tax refund per
annum11. The tenants in common do not possess the right of survivorship but a tenant in common
is entitled to hold an undivided share in the property owned by them and is entitled to possession.
Unlike joint tenancy, the tenants in common do not require to have unity of interest, hence they
are entitled to hold unequal shares. Each of the joint tenants has an equal right to possession of
each of the part that is held by the purchasers and to the whole of the purchased property but
such the tenant shall not be entitled to any right to any part of the property.
It is sufficient that co-ownership exists in the form of tenancy in common in the country
as it enables individuals to purchase property or an interest in land without having to pay for
deposit alone and are entitled to own the property to the extent of the capital deposited by them.
It also entitles them to sell off or mortgage their part of the property, that is separate form te
remaining tenants.
11 Hulse, Kath, and Terry Burke. "Private rental housing in Australia: Political inertia and market change." Housing
in 21st-century Australia: People, practices and policies (2016): 139-152.

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Reference list
Altmann, Erika. "Apartments, co-ownership and sustainability: Implementation barriers for
retrofitting the built environment." Journal of environmental policy & planning 16.4 (2014): 437-
457.
Blandy, Sarah. 14th Australasian Property Law Teachers’ Conference 2017 Beyond Sole
Ownership Curtin Law School, Curtin University, Perth, Western Australia 26–29 September
2017 Draft Conference Programme. Diss. Faculty of Law, University of Southampton, 2017.
Briggs, Kristie. "Co-owner relationships conducive to high quality joint patents." Research
Policy 44.8 (2015): 1566-1573.
Duncan, William D., et al. "Property law review issues paper 4–Mortgages, Co-ownership,
Encroachment and Mistake." (2016).
Hulse, Kath, and Terry Burke. "Private rental housing in Australia: Political inertia and market
change." Housing in 21st-century Australia: People, practices and policies (2016): 139-152.
Kraatz, Judy A., et al. "Rethinking social housing: efficient, effective and equitable." Sustainable
Built Environment National Research Centre Research Report 75 (2015).
Palmer, Jane, et al. "Green tenants: practicing a sustainability ethics for the rental housing
sector." Local Environment 20.8 (2015): 923-939.
Pateman & Anor v Daw Koh & Anor [2007] WASCA 85
Property Law Act 1969 (WA) section 126 (1)

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Rigsby, Bruce. "A survey of property theory and tenure types." Sydney University Press, 2014.
Roberts, Mike B., Anna Bruce, and Iain MacGill. "PV in Australian Apartment Buildings–
Opportunities and Barriers." Asia Pacific Solar Research Conference. 2015.
Robertson, Courtney. "Casenote: State of Western Australia v Alexander Brown and Ors [2014]
HCA 8." Indigenous Law Bulletin8.12 (2014): 24.