Quick answer
Property held by more than one owner can secure a private business loan, but every registered owner must agree and sign the mortgage or caveat. Lenders usually require each owner to receive independent legal advice, especially if an owner doesn't benefit directly from the loan. You can't use a co-owner's share without their consent.
Key points
- Every registered owner must sign the security
- Independent legal advice protects each owner
- Joint tenancy and tenancy in common both work
- One owner's share can't be pledged without consent
- Signatures
- Every owner on title
- Advice
- Independent, for each owner
- Common setups
- Spouses, family, business partners
- Loan size
- $20,000 to $5,000,000
Plenty of the property used to back business loans has more than one name on title. Spouses, siblings, parents and adult children, and business partners all hold property together. It can absolutely be used as security. It just needs everyone on board.
Every owner signs
A mortgage or caveat has to be granted by the registered owners. If two people own a home, both sign. If four siblings inherited a block of land, all four sign. A lender can’t take security over the whole property with only some of the owners agreeing, and taking security over one person’s share alone is rarely workable.
That’s the first thing to check: a current title search shows exactly who the registered owners are, which sometimes surprises people. An ex-partner, a deceased parent or a former business partner may still be on title.
Owners, borrowers and guarantors
People on a co-owned deal can play different roles:
| Role | What it means |
|---|---|
| Borrower | The person or company receiving the loan and responsible for repaying it |
| Mortgagor | An owner who grants the security over the property |
| Guarantor | Someone who promises to repay if the borrower doesn’t |
A spouse who co-owns the home but has no role in the business is usually a mortgagor and often a guarantor. They don’t receive the money, but their share of the property is at risk if the business can’t repay. That’s why lenders take extra care.
Independent legal advice
Most private lenders require each owner who doesn’t directly benefit from the loan to get independent legal advice before signing. The solicitor explains the documents, the risks and the consequences of default, then signs a certificate confirming the advice was given.
This protects the co-owner, and it protects the lender too, because a security signed without proper understanding can be challenged later. Expect the lender to insist on it. Book the solicitor early, because it’s often the step that delays settlement.
Signs a lender will look for
Lenders are alert to arrangements where one owner may not be acting freely. They may ask questions, speak to each owner separately, or decline if something feels wrong. Situations that attract closer attention include:
- an elderly parent securing a child’s business debt
- a spouse who seems unaware of the business’s position
- owners who live apart or are separating
- a co-owner who doesn’t speak English as a first language, without an interpreter
These checks exist for good reason. A fair deal can withstand them.
Joint tenants or tenants in common
Co-owners hold property either as joint tenants, where each owns the whole and the survivor takes all on death, or as tenants in common, where each owns a defined share that passes under their will. For lending, both arrangements need all owners to sign. The difference matters for estate planning and for what happens if one owner dies during the loan, so it’s worth raising with your solicitor.
A worked example
Two business partners in a Coorparoo physiotherapy clinic co-owned the clinic’s freehold premises as tenants in common, each with a half share. The clinic needed $300,000 to open a second location before a lease offer lapsed.
Both partners agreed, signed as mortgagors and guarantors, and each got separate legal advice from different solicitors. A private lender took a first mortgage over the premises. Because both partners were active in the business and both benefited, the process was straightforward and settled in eight business days.
Talk about it before you apply
The most common cause of a failed co-owned deal is a conversation that happened too late. Before you enquire:
- confirm everyone on title is willing in principle
- explain the purpose, the amount and the exit honestly
- agree on who will pay if the business can’t
- consider whether a different property, owned by you alone, would be simpler
When a co-owner lives overseas or interstate
Owners who live elsewhere can still sign, but it takes planning. Documents may need to be witnessed by an authorised person where they live, and independent legal advice must still be arranged. Electronic signing helps in some cases, but not every lender or document allows it. Tell us early if any owner is away, so the timeline allows for couriers, time zones and local witnesses. Someone formally appointed to act for an absent owner may also be able to sign, provided the appointment clearly covers mortgaging property, though lenders will check the document carefully.
Tell us who owns it
Let us know who is on title and each person’s role. We’ll explain what the lender will need and how long it’s likely to take. There’s no credit check when you first enquire, and your information isn’t spread around the market.
Accurate ownership details mean the right documents first time. Start your enquiry, or read about company and trust ownership and then see if you qualify.
Frequently asked questions
Can I borrow against just my half of the property?
Generally not in practice. A lender needs security over the whole property to be able to enforce it, so every owner must sign. A caveat over one owner's share alone is rarely accepted for lending.
Does my co-owner have to be a borrower?
Not always. They may be a mortgagor and guarantor rather than a borrower. They still sign and are still exposed if the loan isn't repaid, which is why independent advice matters.
What if a co-owner won't sign?
Then the property can't be used as security. Consider another property, or a different structure. Pressuring a co-owner is never appropriate and lenders will decline if they suspect it.
Is joint tenancy treated differently from tenancy in common?
For lending, both need every owner's signature. The difference matters more for what happens on death or sale, so ask your solicitor how it affects your estate plans.