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Tenancy in Common Explained: A Practical Guide for Co-Buyers
- Jason Moss
- Jun 15
- 6 min read
Buying property with someone else, whether a friend, sibling, partner, or small investor group, is one way people get onto the property ladder. Before you make an offer, it helps to understand property co ownership basics, starting with how the title will be held. That choice affects what happens to each person's share if someone dies, wants to sell, or stops paying.
This guide explains tenancy in common (TIC) in plain English, using Queensland as an example and noting where rules may differ elsewhere.
What Is Tenancy in Common in Plain Language?
Tenancy in common means two or more people co-own one property, and each person holds a defined share. Those shares can be equal, such as 50/50, or unequal, such as 60/40 or 30/30/40, depending on what the co-owners agree.
Each person is listed on the title for their stated share. Day-to-day use of the property, who lives there, and how expenses are split can be arranged by agreement between the owners. The key point is that each owner's share belongs to them individually. They can generally deal with it separately from the others, subject to any co-ownership agreement, lender conditions, and local law.
Keep in mind that the legal details of TIC differ by jurisdiction. What applies in Queensland may not apply in New South Wales, the UK, Canada, or another location. Always check the rules where you are buying.
Property Co Ownership Basics: TIC vs. Joint Tenancy
Many jurisdictions offer at least two main ways to hold title together. Understanding the differences before you sign a contract is important.
Survivorship. In Queensland, joint tenants typically have a right of survivorship. If one co-owner dies, their share usually passes to the surviving joint tenant or tenants. With tenants in common, a deceased co-owner's share generally passes through their estate, either under their will or intestacy rules, rather than automatically to the other co-owners.
Ownership shares. Joint tenants usually hold equal shares. Tenants in common can hold unequal shares, which is useful when one person contributes more toward the deposit, purchase price, or ongoing costs.
Selling or transferring a share. With TIC, each owner can generally sell or transfer their individual share, although practical restrictions, lender approval, and private agreements may apply. With joint tenancy, dealing with a share independently is more limited.
Typical use cases. Joint tenancy is often chosen by couples who want the survivor to inherit automatically. TIC tends to suit friends, siblings, blended families, or investor groups who want estate separation and flexibility on share sizes.
When TIC May Fit (and When It May Not)
TIC is worth considering when co-buyers have unequal deposits, when each person wants their share to pass to their own beneficiaries, or when a small investor group needs clearly defined stakes.
Common scenarios where TIC can work well include:
Two friends buying together, with one contributing 60% of the deposit and the other 40%.
Siblings pooling funds while each wants their share protected for their own family.
A small investor group of three or four people splitting costs and returns by agreed percentages.
There are also drawbacks to consider:
Coordination costs. Major decisions, such as selling, refinancing, or approving major repairs, need agreement or a process for resolving disputes.
Financing hurdles. Lenders may require all co-owners on the mortgage, creating joint and several liability. In simple terms, each borrower may be responsible for the full debt, not only their share. One person's missed payment can affect everyone.
Forced sale risk. In some jurisdictions, a co-owner can apply to a court to force a sale if the group cannot agree. Check locally for how this works.
There is no universal best ownership structure. The right choice depends on your group's finances, relationships, and long-term plans.
Decide Ownership Shares Up Front
Before signing anything, agree on how shares will be divided. A common starting point is to base shares on each person's financial contribution, including the deposit, stamp duty, legal fees, and ongoing mortgage payments.
Shares and expense splits can differ. One person might own 40% but agree to cover 50% of the mortgage because they live in the property full-time while the other treats it as an investment. What matters is that every arrangement is written down clearly.
Create a simple schedule showing each person's contribution at settlement and the agreed ownership percentage. Update it if contributions change over time.
Draft a Co-Ownership Agreement
A written co-ownership agreement is one of the most useful steps you can take. It does not replace legal advice, but it gives your conveyancer or lawyer a clear framework to formalise.
Practical clauses to discuss and include are:
Ownership percentages for each party.
Who lives in the property and who holds it as an investment.
Expense responsibilities for council rates, insurance, maintenance, and repairs.
How improvement decisions and costs are approved.
Decision thresholds for selling or refinancing, such as unanimous approval or majority approval.
Right of first refusal if someone wants to sell their share.
Buy-out process and valuation method, such as an independent valuation or agreed formula.
Dispute resolution steps before court action.
What happens on default or non-payment.
How death, incapacity, or departure of a co-owner is handled.
Where documents are stored and how often the agreement is reviewed.
Financing and Title Logistics
Talk to your lender early. Many lenders require all co-buyers to be on the loan, meaning everyone may be responsible for the full amount. If one person stops paying, the others must cover the shortfall or risk default.
Before making an offer, confirm these points with your lender:
Whether unequal ownership shares affect loan approval.
How the property will be classified, such as owner-occupied or investment, and whether mixed use is allowed.
What documents the lender needs to show each person's contribution.
For insurance, decide who arranges building cover and who handles contents. Make sure the policy names all co-owners where required.
Estate Planning and Protection
Because a TIC share passes through your estate rather than automatically to the other co-owners, each person needs a current will that reflects the co-ownership arrangement. Without a valid will, intestacy rules apply, and the outcome may not match anyone's intentions.
Consider whether life insurance could fund a buy-out so surviving co-owners are not forced to sell. Align beneficiary designations with the co-ownership agreement to reduce conflicts. The treatment of death and incapacity varies by jurisdiction, so get local advice on powers of attorney and related protections.
Plan Your Exits Before You Enter
The best time to agree on an exit plan is before you own the property together. Define triggers such as job relocation, relationship change, prolonged non-payment, timelines, and exit pathways.
For example, two friends own a unit 50/50. One wants out. Under their agreement, the departing owner gives 90 days' written notice. An independent valuer sets the market value. The remaining owner has 60 days to match the valuation and buy the share. If they cannot, the property goes to market. This kind of clarity can prevent months of argument later.
Regional Variations and Where to Learn More (Queensland)
Property co-ownership rules differ between Australian states and territories, and even more between countries. This guide uses Queensland examples, but your location may have different requirements for stamp duty, title registration, severance of joint tenancies, or dispute resolution.
In Queensland, property owners may be able to change their ownership structure later, such as moving from joint tenancy to tenants in common, subject to the correct process and professional guidance. If you are buying in Queensland and want a commercial legal-service resource that explains survivorship, defined shares, and estate-planning basics, this plain-English explainer on tenancy in common may be a useful starting point. Treat that resource as general information, not personalised legal advice.
For readers elsewhere, confirm the rules with a local conveyancer, solicitor, or lawyer before relying on any jurisdiction-specific detail.
Quick Pre-Purchase Checklist
Before you make an offer as co-buyers, work through these steps together:
Agree on ownership shares and document each person's financial contribution.
Get pre-approved as a group and confirm lender requirements for unequal shares.
Decide who will live in the property and how it will be used.
Set an expense policy covering rates, insurance, maintenance, and repairs.
Establish approval thresholds for improvements, sales, and refinancing.
Define exit and buy-out terms, including valuation method and timelines.
Update wills and consider life insurance to protect all parties.
Arrange building and contents insurance naming all co-owners where needed.
Put everything in writing in a co-ownership agreement reviewed by a solicitor or lawyer.
Schedule an annual review of the agreement and financial records.
Wrapping Up
Co-buying property does not have to be messy, but it does need planning. A clear ownership structure, a written agreement, and honest conversations about money and exits can make the arrangement easier to manage. Take the checklist above to a local conveyancer or lawyer and your lender so they can check the details against the rules in your jurisdiction.
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