Co-Ownership: Types of Estates

Fee Simple or Freehold Ownership

Largest estate recognized by common law, practically of unlimited duration.

Life Estate

Holder enjoys rights of use and occupation during their life, with limited power of alienation; interest cannot be passed by will.

Leasehold Interests

A proprietary interest with no limit to duration; can be for 99 or even 999 years.

Future Interests

Interests that do not exist at the moment, but the holder will become entitled to legal estates in land if certain conditions occur.

Co-Ownership

Simultaneous entitlement where two or more people are simultaneously entitled to the same parcel of land.

Joint Tenancies

Two or more co-owners in the same piece of land, in law, that are constituted as a single owner.

Title (4 Unities)

Each JT's title must be derived from the same instrument.

Time (4 Unities)

Rights of the JTs commence simultaneously.

Interest (4 Unities)

JTs have to hold the same nature of interest and the same duration.

Possession (4 Unities)

Each JT is just as much entitled to possession of all or any part of the land as the other.

Right of Survivorship

When 1 JT dies, their interest is extinguished, and it accrues to the remaining JTs whose interests are correspondingly enlarged.

Homicide of one JT by Another

Killer is not entitled to any interest in any property that the killer jointly owned with the victim and that otherwise would have passed to the killer; property devolves as if the killer predeceased the victim.

Union in a Sole Tenant

When there is a single owner, co-ownership is clearly at an end.

Partition

Division of jointly-held land into separate holdings reflecting each owner's respective share.

Severance

Destroys the unity of interest or title.

Express Creation of Tenancy in Common

When words of severance are included in the transfer instrument, indicating an intention for co-owners to take separate shares.

Creation by Implication of Equity (Unequal Shares)

Where purchasers provide purchase money in unequal shares.

Creation by Implication of Equity (Jointly Lent Money)

Joint tenancy should not exist between the ownership rights of mortgagees. Equity dictates that interest on the loan should not be subject to survivorship.

Creation by Implication of Equity (Partnership Assets)

Partners in a commercial venture acquired land as partnership assets, they were assumed to hold the land as TICs. The mechanism of survivorship has no place between business partners.

Conversion of Tenancy in Common to Joint Tenancy

Under the Property Law Act 2007, TICs may declare themselves as JTs in deed.

Partition (Tenancy in Common)

Division of land into separate holdings.

Originally provided for of a Joint Family Home

Savings on death duties (Inheritance tax), Protection against unsecured creditors, Security for a spouse not on the title.

Issues of a Joint Family Home

Applies only to a 'husband' and 'wife,' excluding couples in de facto relationships.

Remaining advantages of a Joint Family Home

Protection from creditors and minor savings in legal costs.

Fee Simple or Freehold Ownership

Largest estate recognized by common law, practically of unlimited duration. Terminates only if the current owner dies without a will and has no identifiable successors (extremely rare).

Life Estate

A fee simple estate, but the holder only enjoys the rights of use and occupation during their life. Limited power of alienation; interest cannot be passed by will.

Leasehold Interests

Leasehold is a proprietary interest with no limit to duration; can be for 99 or even 999 years.

Future Interests

Interests do not exist at the moment, but the holder will become entitled to legal estates in land. Includes Reversions and Remainders.

Co-Ownership

Simultaneous entitlement where two or more people are simultaneously entitled to the same parcel of land, although they may not have the same entitlements.

Joint Tenancies

Two or more co-owners in the same piece of land, in law, that are constituted as a single owner, with equal entitlement to the entire property and the right of survivorship.

Tenancy in Common

Co-ownership where each tenant holds a separate share of the property. Shares can be unequal, and there is no right of survivorship.

Joint Family Homes

A specific type of co-ownership in New Zealand designed for married couples, offering some protection against creditors and minor savings in legal costs.

The 4 Unities

Title, Time, Interest, Possession

Survivorship

When 1 JT dies, their interest is extinguished, and it accrues to the remaining JTs whose interests are correspondingly enlarged. The entire estate survives to the living JTs.