Here is an important fact to be aware of when it comes to the world of caveat lending:
People that own properties as joint tenants own 100% of the property together. This means Mr A owns 100% of the property and Mrs A owns 100% of the property. There are no shares – where there are shares this is called tenants in common.
If one of the joint tenants dies (say Mr A) then immediately upon death the property becomes solely owned by the surviving tenant (Mrs A). The result is that if your security is Mr A’s interest in the property and he dies you will lose your security because upon death 100% of the property automatically vests with Mrs A. Of course, if you also have a security interest in Mrs A’s interest in the property your security will remain unaffected.
The above scenario only applies if:
- Mr A dies.
- You do not have an interest in Mrs A’s share in the property.
- It is a joint tenant property.
For assistance securing your loans, please contact us.