When a person who owns residential property passes away, how the property is transferred to others depends on how it was held—either jointly or as tenants in common. These terms have nothing to do with rental properties; they are legal terms used to describe specific types of property ownership.
Your lawyer can easily determine the ownership structure by conducting a title search and checking for any potential barriers—such as caveats or notices of claim—that may prevent the sale of a deceased person’s property.
What is Jointly Held Property?
Often, when married or de facto couples purchase a property, it is set up to be owned jointly. This means the owners (joint tenants) each hold an undivided, equal interest in the entire property.
When one owner dies, their share automatically passes to the surviving owner under the common law right of survivorship. This right overrides the provisions of the deceased’s will, meaning the property share does not become part of the estate.
The surviving owner’s lawyer must complete a transmission by survivorship promptly. If this isn’t done before the surviving owner passes away, a much more complicated legal process may arise.
Once the transmission is registered, the surviving owner becomes the legal owner on the title. The property can then be sold.
What Does Tenants in Common Mean?
In contrast, if the title records individual owners holding defined shares, this is known as tenants in common.
When one owner dies, their share passes to their beneficiaries according to their will—or, if they died without a will (intestate), according to the Administration Act.
The right of survivorship in this arrangement can have serious implications, particularly for blended families or where an owner wishes to ensure their share goes to specific people. If ownership is not set up correctly, it can jeopardise inheritance expectations.
When Can the Property Be Transmitted?
If a property is held in one person’s sole name, or as a defined share of tenants in common, it forms part of the deceased’s estate. A grant of probate or letters of administration must be obtained from the High Court before the property can be transferred or sold.
Once the transmission to the personal representative (executor or administrator) is registered on the title, the property is legally recorded as being held by the estate.
For example, the title may read: “Jane Jones as Executor” or “Jane Jones as Administrator.”
This step must be completed before the property can be sold or transferred to any beneficiaries. A notice of change of ownership will also be sent to the local council and water providers.
It is essential that executor(s)/administrator(s) maintain home insurance and notify the insurer if the property is unoccupied.
When Can Estate Property Be Sold?
Once transmission is complete, the executor or administrator can begin marketing the property.
It’s strongly advised to consult a solicitor before signing a sale and purchase agreement. In deceased estate sales, specific legal clauses may need to be included—especially to limit vendor warranties where the executor did not previously own the property or is unaware of alterations.
Lawyers should review all agreements before any are signed. On settlement, the sale proceeds go into the estate account, ready to be distributed to beneficiaries in accordance with the will or intestacy laws.
If one beneficiary wishes to retain the property, a registered valuation is needed. The other beneficiaries must agree on the property’s value and the distribution amounts.
If the property’s value exceeds the beneficiary’s inheritance share, they may need to contribute extra funds to the estate. This can be arranged through a registered mortgage and loan.
