Settlement advice when needed most

Background

AustAsia Group’s settlement agency Master Settlements was recently contacted by a young couple, who were in the process of buying a house. The couple were first home buyers and engaged Master Settlements to deal with the property settlement.

As a part of our standard process, the couple provided us with a copy of their Offer & Acceptance (“Contract”). On reviewing the Contract, the experienced team at Master Settlements realised the real estate agent had failed to record the type of ownership the couple wanted to have for the property, which was critical to complete the settlement.

The real estate agent had failed to explain the key differences, importance and implications of the two types of ownerships available to any purchaser of a property, as we have explained below.

With an incomplete Contract, our clients’ property settlement could not proceed.

AAG in Action

Our clients were quite stressed by this problem but also relieved to know that the experienced team at Master Settlements was able to resolve the matter on their behalf, giving them peace of mind.

Our settlement team was confidently able to address the issue and alerted all involved parties in the matter, including the real estate agent and the seller’s settlement agent, within a short span of time. A notice was served that the Contract was incomplete, and required an urgent amendment for the sale to proceed.

Result

The real estate agent acknowledged their error and co-operated with us by providing a complete Contract. Master Settlements was able to carry out the settlement in a timely manner ensuring that our clients’ intentions and best interests were protected. Our clients were delighted with Master Settlements’ knowledge and professionalism and that their settlement was able to happen on time.

Types of ownership of property

Joint Tenancy

This is a form of co-ownership in which the following principles apply:

1. Each Joint Tenant/Owner owns the whole of the property with the other Joint Tenants/Owner or Owners. No one party has a defined share in the property whilst Joint Tenancy continues. This means that the Joint Tenants essentially have equal interests in the property and are entitled equally to its rents and profits. There can be two or more Joint Tenants.
2. The principle of ‘survivorship’ applies, which means that on the death of one Joint Tenant the surviving Joint Tenant or Joint Tenants automatically continue to hold the whole property by operation of law. Consequently, any property held in Joint Tenancy does not form part of a Joint Tenant’s estate and he/she cannot deal with it in his or her Will.
3. In general, Joint Tenancy is common in married couples or partners in a de-facto relationship as they prefer owning the property equally, and for the rule of ‘survivorship’ to apply to their property. It is not so common in other relationships.

Tenancy in Common

In contrast to Joint Tenancy, in this form of co-ownership:

1. Property is held in common by one or more persons where each owner has a defined share in the property. Each Tenant in Common share being defined, it forms part of his or her estate and can be dealt with in his or her Will or in the event of an intestacy (person dying without a Will) shall pass on to the beneficiaries set out in the relevant laws.
2. Tenants in Common have fixed undivided shares in the property. Tenants in Common may have unequal shares (for example, two-thirds to one party and one-third to the other).

If you hold any property as a Joint Tenant you can convert it to Tenancy in Common however, we recommend taking proper expert advice before taking this action.

All contracts are different, so it is imperative that before any agreements, contracts or transfers are signed that they are reviewed by AustAsia Group in either a Legal or Settlements capacity. If you need more information or any help with your property questions, please call AustAsia Group on (08) 9227 6300 or email clientservices@austasiagroup.com