In Aotearoa New Zealand, the concept of owning a whare (house) can take various forms, with 'tenants in common' being a popular choice for many Kiwis. This ownership model offers flexibility and independence, making it an attractive option for friends, whānau (family), or business partners who wish to invest together.

Understanding Shared Ownership

Shared ownership under the tenants in common structure allows two or more individuals to hold an undivided interest in a property. However, unlike traditional joint tenancy, each party has separate and distinct shares which can be unequal. This means you could have a 50 percent stake in your holiday bach while your mate owns the remaining half, or any other percentage that suits your arrangement.

The Nature of Independent Shares

One of the key features of tenants in common is the autonomy it provides. Each owner has their specific portion of the property, which they can sell, transfer, or mortgage independently of the others. This means if you decide to sell your share or use it as security for a loan, you're free to do so without needing consent from your co-owners – giving you significant control over your investment.

No Right of Survivorship

A stark difference between joint tenancy and tenants in common is what happens when one owner passes away. In a tenants in common arrangement, there's no right of survivorship; if one owner dies, their share doesn't automatically pass on to the surviving owners. Instead, it's dealt with according to their will or follows the rules of intestacy if no will exists. It's essential to consider this when planning your estate to ensure your share ends up in the right hands.

Flexibility in Ownership Proportions

Tenants in common isn't a one-size-fits-all solution – it's tailored to fit different contributions from each owner. Whether you're chipping in for a quarter or three-quarters of the property's value, this flexibility allows for varying sizes of investment from each co-owner. It's particularly handy for those not able to contribute equally but still wanting to get on the property ladder.

Suitable for Various Types of Co-owners

Whether you're pooling resources with mates to buy your first home close to the city centre or joining forces with business partners for commercial real estate, tenants in common caters to diverse needs. This form of ownership can align with different relationships and investment goals, making it a versatile option for many scenarios.

Responsibilities and Considerations

Owning property as tenants in common comes with its set of responsibilities too. All owners must agree on matters affecting the entire property like insurance and maintenance expenses. It’s also wise to enter into a co-ownership agreement that outlines how decisions are made and what happens if someone wants out.

Tenants in common offers an alternative pathway for those looking to enter New Zealand’s property market alongside others. With its independence and flexibility reflecting our Kiwi ethos of fairness and freedom, it’s clear why this option is favoured by many. Just remember that with great autonomy comes great responsibility – legal advice is always recommended when entering into shared ownership arrangements.

Whether you’re looking at buying a piece of Aotearoa with mates or investing with whānau, understanding your rights and responsibilities is crucial for peace of mind on your property journey.