A Contract of Sale or Offer and Acceptance can place and identify the forms of Ownership.
Agents need to explain the differences to buyers so they can choose the option that best suits them.
In Western Australia, there are three common forms of Ownership specified in a Contract of Sale for land:
- Sole Ownership
- Meaning: One person owns the entire property individually. This individual has complete control over the property and can make decisions regarding its use, sale, or transfer without others needing consent. Upon the Owner’s passing, the property typically transfers according to their will or intestacy laws.
- Joint Tenancy
- Meaning: Joint tenancy involves two or more individuals collectively owning the entire property. In the event of a joint tenant’s death, their share automatically passes to the surviving joint tenant(s), bypassing the deceased’s will. This form of Ownership is common for couples and family members who want the property to transfer seamlessly to the remaining Owner/s.
- Tenancy in Common
- Meaning: Unlike joint tenancy, tenants in common each own a specific share or interest in the property. The shares do not have to be equal, and each Owner can freely transfer, sell, or will their share without the need for consent from the other Owners. In case of death, the deceased’s share is distributed according to the will or intestacy laws, not automatically passing to the other Owners.
These forms of Ownership in a Contract of Sale for land provide flexibility for individuals or groups to manage their property rights and transfer those rights in the future. It’s important for parties involved to understand the implications of each type of Ownership before entering into a land sale transaction.