Navigating Property Ownership After the Passing of a Joint Tenant in NZ
Losing a joint property owner is a difficult time. In New Zealand, if you co-owned a property as joint tenants, you must navigate a series of legal and financial steps to formally transfer the property into your name.
This guide explains the crucial process of “transmission by survivorship,” why you must notify the bank (especially if there’s a mortgage), and how it differs from a “tenancy in common.”
Understanding Joint Tenancy & The Right of Survivorship
When a property is owned by two or more people as joint tenants, the principle of right of survivorship applies. This is the most common form of co-ownership for couples in NZ.
- What it means: Upon the death of one joint tenant, their share in the property automatically and immediately passes to the surviving joint tenant(s).
- Key feature: This transfer happens by operation of law, regardless of any conflicting provisions in the deceased’s will.
The Formal Step: Transmission by Survivorship
Even though the ownership transfer is automatic, the property’s title must be officially updated with Land Information New Zealand (LINZ). This is done through a legal process called transmission by survivorship.
This process formally removes the deceased’s name from the property title, leaving the survivor as the sole registered owner. A lawyer or conveyancer is required to prepare and lodge the necessary documents, including a certified copy of the death certificate.
How is Tenancy in Common Different?
It’s important to know if your ownership is structured differently. Under a tenancy in common:
- Each owner holds a distinct, separate share of the property (e.g., 50/50, 70/30).
- There is no right of survivorship.
- When a tenant in common dies, their share does not automatically go to the other owners. Instead, it becomes part of their estate and is distributed according to their will or the laws of intestacy.
Notifying the Bank: A Crucial Step for Mortgaged Properties
If the property has a mortgage, it is imperative to promptly notify the bank or financial institution of the owner’s passing.
Why You Must Inform the Bank
- Mortgage Obligations: The death of a joint borrower does not cancel the mortgage debt. The surviving owner becomes solely responsible for the entire mortgage. The bank needs to update its records and discuss the loan’s future with you.
- Loan Affordability & Restructuring: The bank will need to assess your financial capacity to service the mortgage alone. This may lead to restructuring the loan (e.g., changing repayment terms). If affordability is an issue, they will discuss other options, which could include selling the property.
- Access to Bank Accounts: The bank will freeze any accounts held solely in the deceased’s name. Joint bank accounts, however, generally pass to the surviving account holder. Informing the bank ensures the orderly management of these accounts and any automatic payments.
- Mortgage Protection Insurance: This is a critical step to initiate a claim on any life or mortgage protection insurance policies linked to the loan. A successful claim could significantly reduce or completely pay off the outstanding mortgage balance.
What to Provide to the Bank
Be prepared to supply the following documents:
- A certified copy of the death certificate
- Your personal identification (e.g., driver’s licence, passport)
- Details of the joint mortgage account
The bank will guide you through its specific procedures, which will likely involve signing new paperwork to formally transfer the mortgage into your sole name.
Get Help with a Fast, Inexpensive Transmission by Survivorship
We can ensure the legal transfer of your property is completed correctly and efficiently, giving you peace of mind during a stressful time. Our experienced team will handle the entire transmission by survivorship process with LINZ on your behalf.
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