Owning Property Jointly

Residential Property

Ways to hold jointly owned property

When buying property jointly there are two ways in which you can hold the title. These are known as Joint Tenants or Tenants in Common. Both terms describe the way you own the property and have a different meaning to a landlord and tenant relationship.

 

Joint Tenants
If you hold as Joint Tenants you are seen as holding the whole of the property jointly, without any specific shares being attributed to either of you. If you sell the property the proceeds of the sale will be yours jointly. If one of you were to die the property would pass automatically to the survivor, irrespective of any wish set down in a will. This is known as the ‘right of survivorship’.

 

Tenants in Common
The other option is to hold as Tenants in Common. Although you will still own the property jointly, you are each seen as owning a specified share. It is this share that can be transferred or left to someone in a will. If you do not have a will at the time of your death then your share will pass in accordance with the intestacy rules.
This option is generally preferable for those who have made unequal contributions to the purchase price, or, for example, if you have a family from an earlier marriage to whom you would want to leave your interest in the property. Most unmarried couples or friends buying together would choose this option. If you opt for a tenancy in common you should ensure that you have an up to date will specifying who is to receive your share on your death.

 

Equal or Unequal shares
If you hold as Tenants in Common you can stipulate the shares that each of you holds. This can either be 50/50 or any other percentage split which is appropriate for you. If you are contributing different amounts to the purchase price, or are intending to pay different amounts to any mortgage repayments, then you can detail this and the resulting shares you each hold in a document called a Declaration of Trust.

 

What if we want to change the way we hold the property?
If you start holding the property as Joint Tenants either of you can choose to ‘sever the tenancy’ at any time by serving notice to this effect on the other. There does not have to be a joint agreement to do this, as either party can sever the tenancy without the consent of the other.

A Joint Tenancy would also automatically be severed if one of the owners were to be made bankrupt.

On severing the Joint Tenancy, you are deemed to hold the property as Tenants in Common in equal shares. You can change this presumption by jointly entering into a Declaration of Trust but one of you alone cannot change the presumption.

 

What if our circumstances change?
A decision in the House of Lords led to a change in how jointly owned property are viewed. If your circumstances change dramatically, or if it is deemed that your common intentions with regard to the property have changed, then the courts can dictate an unequal split of the property rather than sticking to the presumption of 50/50.

If you do hold property as joint tenants and you decide to separate, or if you hold property as tenants in common and your contributions to the mortgage etc. change, then it is recommended that you revisit the way you hold the property and any Declaration of Trust you may have in place provided your co-owner agrees to do so.

 

This document is for general information only and is not intended to provide legal advice. Dixon Ward accept no liability in connection with any loss suffered as a result of reliance on the information contained in this factsheet

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