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    Joint Ownership for Property

    Apr 16, 2019 4:05:59 PM

    When partners purchase a property together they are known as joint tenants. The most important legal concept in joint ownership is survivorship. So, what does that mean?

    When one of the joint owners die, their interest in the property passes onto the survivor. This is subject to any alteration in ownership made before death or a court order, whereby they are no longer joint owners.

    The idea of survivorship is important because the terms of a will do not change the interest passing on to the surviving owner which can lead to an unfair outcome. For example, if joint owners fall out and therefore do not have each other has beneficiaries in their wills, the surviving owner will receive all the interest of the property and the actual beneficiary of the deceased owner will miss out on the interest in the asset.

    Therefore, it is very helpful to have a Co-ownership Agreement (The Agreement) to promote fairness between the joint owners.

    The Agreement can record what should happen to the proceeds of the property even after the death of one of the parties.

    The question, are joint tenants entitled to an even split of a sold property, is considered in the 1999 decision of Kevin William Mauger v Michael Pearson.

    The Court was required to determine the entitlement to the proceeds of sale of property 27 Edward Street, Marrickville. The plaintiff, Mauger, and the defendant, Pearson, had been recorded as the registered proprietors as joint tenants.

    The Facts

    • They first lived together at 11 Bridge Street, Erskineville, which was owned by Pearson.
    • In 1992 they moved to Perth. After a short time, they purchased 48 Hampshire Street, East Victoria Park, Perth. The purchase price was $94,000. They borrowed $75,000 and contributed equally towards the balance.
    • It was agreed that they both had equal shares in the Perth property notwithstanding Mauger contributed his share over a period.
    • In 1994, the Perth property was sold, and the net proceeds was put into a joint account in both of their names.
    • They returned to Sydney and lived in the Erskineville property for a while.
    • They then purchased a property at 27 Edward Street, Marrickville for $250,000. The property was placed in their names as joint tenants.
    • The purchase was funded by borrowings, funds from a joint account and the sale proceeds of the Perth property and the Erskineville property.
    • Mauger contributed about $67,500 and Pearson contributed about $197,500, a total of $265,000.
    • On that basis the proportional interest of Mauger in the property in accordance with contributions to the purchase price would be about 25.5%.
    • Some time prior to November 1997 the relationship came to an end.
    • In November 1997 the Marrickville property was sold for $362,000 and after discharging the mortgage and paying costs the sum of $241,080 was paid to the joint account.
    • Mauger sought a declaration that it should be held in proportion to the contributions of each to the acquisition of the funds.

    You might think that this a straight forward question.  The issue was complicated by the fact that the parties made unequal contributions to the funding of the purchase of property as joint tenants.

    After considering the evidence and applying some complex principles of trust law the court concluded that the parties should equally share the proceeds of sale of the Marrickville property.


    The expensive litigation could have been avoided. If the parties, had set out their preferred arrangements in the terms of a Co-ownership Agreement before they co-mingled their assets to purchase real estate, then their individual rights and obligations would have been defined and secured in advance.  

    If you are contemplating purchasing property with another person, contact our Property team to get advice before it is too late.

    This is not legal advice.

    Photo by Emre Can from Pexels

    Andrew Frank

    Written by Andrew Frank