I was a guest recently on a Bond University podcast about housing, and one question caught me off guard. We were talking about co-ownership, about friends and family buying a home together because buying alone has become impossible, and Dr Johari Amar asked what people should think about before they do it. I gave an answer about partition, then spent the drive home turning it over, because I had not put it as plainly as I wanted to. This is the answer I wish I had given.
Australia: What co-owners actually own
Picture two friends, Sarah and Maya. Neither can afford a place alone, so they pool their savings and buy a house together. The day they get the keys, each of them feels like she owns half a home. That is the intuition, and in a market this brutal it is an appealing one. In strict legal terms, they each own half, and nothing here takes that away. But when people picture owning a home, they are picturing more than a share on a title. They are picturing security, the settled sense that the place is theirs and no one can move them on. That part, the part most people would call the essence of it, is the part co-ownership cannot give them.
Here is why. When co-owners fall out in New South Wales, section 66G of the Conveyancing Act 1919 lets one of them force the sale of the whole property. The court appoints trustees and the house is sold, usually whether the other owner likes it or not. The power is technically discretionary, but courts read that discretion narrowly. To resist, you generally need a recognised legal reason, such as an agreement not to sell. Simply wanting to stay in your home is not enough.
There are good policy reasons for this. A law that locked people into co-ownership against their will would be its own kind of trap, and the ability to force a sale stops one owner holding another hostage. So the rule is not a mistake. But it is worth being clear about what it does to the thing you thought you owned. The security to stay put, to not be moved on against your will, is close to the heart of what most people mean when they say they own their home. A co-owner does not have that. At any time, the other owner can set in motion the sale of the roof over your head. So co-ownership is not fee simple cut in two. Each owner ends up with less than half, because the part that goes missing is the part that made it feel like ownership in the first place.
That is the thing worth knowing before you buy with someone. Not that you cannot do it, or that it is unsafe, but that the law is not built to support co-ownership as a persisting state. The law only steps in in a meaningful way when someone wants to exit. The rights of an ordinary sole owner are worked out in fine detail across our legislation and case law. Co-ownership gets almost none of that attention. When it comes to holding property together, the main thing the law knows how to do is break it apart.
This post discusses why that is a choice rather than a fact of nature, and how other systems have done things differently.
The United States: A fairer way out
The United States starts in a similar place; a co-owner can force the end of co-ownership through partition by sale. But over the last fifteen years many American states grew worried about a specific, damaging pattern involving what is called heirs’ property.
The problem was structural. Land, often rural, was held within Black and other historically marginalised families across generations, passed down without wills so that ownership fragmented among dozens of descendants. Because any co-owner can seek partition, an outside investor could buy one small share from a single distant relative, then go to court and force a sale of the whole property. The land sold cheaply at auction and generational wealth vanished in a single transaction. Partition, designed as an exit, had become a tool of dispossession.
The response, now adopted in many states, was the Uniform Partition of Heirs Property Act. It does not abolish partition; it builds process around it: an independent valuation before any sale, a right of first refusal for the co-owners who did not ask to sell, a preference for physical division, and an open-market sale rather than a quick auction where a sale must happen.
This is a sensible, targeted reform aimed at a real problem, and for that problem it may work perfectly well. It leaves the right to force a sale intact and seeks to make the exit fairer. After the new procedure runs its course, the destination is unchanged: someone is bought out, or the property is sold. It makes the off-ramp gentler.
But what if, instead of softening the exit, you changed the shape of the right itself? To imagine that, it helps to look at places that think about housing in a fundamentally different way.
Europe: a different idea of what a home is for
The hardest thing to see from inside our own system is the underlying assumptions informing the relevant mechanisms. In Australia, the freehold house on its own block is the dream, and our property law is built around that aspiration: sole ownership as the ideal, and everything else, including co-ownership, treated as a lesser or transitional version of it.
Plenty of wealthy countries never organised themselves around that single goal, and the numbers make the point better than any argument. On recent OECD figures, Australia sits where you would expect, with around two-thirds of households on the ownership side of the ledger. Germany and Switzerland do not. In both, tenant households outnumber owner-occupiers, and renting at market rate is the single most common way people live: about 52 per cent of households in Germany, and about 57 per cent in Switzerland. These are not struggling economies failing to get their people into homes. They are rich, stable places where most people rent, and renting is not treated as a failure to buy.[i]
In Australia, when we think about “renting” we typically imagine something insecure and “less than”: a twelve-month lease, periodic inspections, the landlord’s right not to renew, and the quiet understanding that you do not really get to call it home. In much of continental Europe, renting means something closer to long-term occupation. Leases can run indefinitely, the grounds for eviction are narrow, tenants can make the place their own, and the expectation is that you stay. The legal structure changes the nature of the thing being rented. It stops being temporary accommodation and becomes a home you happen not to hold the title to.
Once you see that there are other ways of thinking, the binary we work with, owner on one side, tenant on the other, starts to look less like the natural order and more like a local habit. And several of these systems have established kinds of tenure that sit deliberately in the gap between the two.
The clearest example is the housing cooperative, which is far more common in parts of Europe than here. You do not own your apartment outright, and you do not rent it in the ordinary sense. You buy a share or membership in the cooperative that owns the building, and that share includes the right to occupy your home. The cooperative controls how interests are transferred and priced, which insulates the housing from speculation. For Australian observers it is a useful jolt, because it does not fit the owner-versus-tenant binary at all. It is a form of collective holding designed to be lived in, and a corresponding legal paradigm.
Others have gone further and legislated genuine middle grounds. Finland has a recognised “right of occupancy”: a resident pays a deposit of around 15 per cent of the dwelling’s price plus an ongoing fee, cannot buy the property outright, but gains real security of tenure, and on leaving has the deposit returned, adjusted for construction costs. It is neither ownership nor renting. It is a third thing the law decided to create, because someone asked what people actually need from a home and answered with more than two options.[ii]
The thread running through all of this is the same. Australia tends to assume that security comes from ownership, so the only real housing goal available is to ultimately own your own home. A lot of Europe assumes that security can come from the legal structure of occupation itself, which means there is more than one acceptable way to be securely housed. That is not a tenancy-law detail. It is a different idea of what a home is for and what is worth protecting.
Shape, not safeguards
The American and the European responses are aimed at the same human problem, that housing arrangements break down and people get hurt, but they answer it at completely different levels. The American reform keeps the right to force a sale exactly as it is and softens the consequences of using it. For the harm it targets, that may be exactly right. It is reform by safeguard.
The European examples change the shape of the right itself, and they can do that because they sit in societies with a different idea of what owning a home is for. A cooperative share, a right of occupancy, a lifelong secure tenancy: these are not safeguards bolted onto a sale. They are different conceptions of how a person can belong to a home, grown in places where sole freehold was never the only respectable option.
The way Australians live has moved faster than our idea of what ownership is supposed to look like. As the dream of owning a home alone slips out of reach and many are unwilling to settle into renting for life, co-ownership, among friends, siblings, unmarried couples, and groups pooling what they have, is rising fast. But the reality of co-ownership is that it continues in many ways to function as just another lesser, transitional thing.
I’m not saying that co-ownership isn’t a viable option, preferable in many cases to solo ownership and renting – rather that it should be approached with care. A co-owner here who wants stability can try to build it privately, through an agreement drafted by a solicitor. Some do. Most do not, because they are optimistic, because they are in a hurry, and because nothing in the law signals that long-term co-ownership is a valuable thing to step up and protect properly. Other legal systems we have looked at seem to do a better job of creating genuine alternative options for those seeking security, and we should look to the comparative experience moving forwards. This doesn’t mean importing another country’s system wholesale, and I do not want to romanticise. Every one of these arrangements has its own rigidities, and a tenure built to protect rights in co-ownership can trap people just as a too-easy exit can dispossess them. No system has made housing painless. But the comparison shows that the shape of the right is a choice, and that the choice follows from what a society thinks a home is for. From inside our own system, partition feels like the obvious and only answer to co-ownership gone wrong. It is not. It is one design among several, built for a particular dream of ownership that fewer and fewer people can actually reach.
If co-ownership is going to be a serious and growing part of how Australians hold their homes, and it plainly is, the question is not only how to make the exit fairer. It is whether the law should offer people a way of owning together that is actually built to hold. That is the conversation I would like us to be having. The exit will always need to be there. It just should not be the only thing the law knows how to do.
If you are buying with someone, or dealing with a co-ownership that has broken down, feel free to get in touch for a free consultation.
[i] Figures drawn from the OECD Affordable Housing Database.
[ii] Vienna is the most striking example of all, though it sits outside the frame of this piece. Well over half its residents live in municipal or subsidised housing, much of it provided through the city or through housing cooperatives rather than private landlords, and the result is a place where stable, long-term housing is simply not tied to private ownership. It is worth attention because it shows that the shape of the right is not the only variable. Governments can act differently in this equation too, deciding that secure housing is something the state will provide and then building the legal and institutional forms to do it. That is a question about provision rather than about the design of a private right, which is why it belongs in a note rather than the argument above, but it is part of the same lesson: how other countries house their people is a choice, not a given.
