Joint Tenants Or Tenants In Common – Which One Is Right For A Couple Buying A Property Together?
“Joint Tenants Or Tenants in Common – Which One Is Right For A Couple Buying A Property Together?” Trainee Solicitor Connor Ball-Wood discusses…
When buying a property together, couples have a choice of recording their beneficial interest (equity) in the property as ‘joint tenants’ or ‘tenants in common’.
If you are buying a property with someone else, it is advisable to think carefully about how you want to hold the equity to avoid future disputes.
Joint Tenants
Under a joint tenancy, both parties own the whole of the property jointly. Neither party will have a quantified share. Holding a property as joint tenants tends to be the most common option for married couples buying a property together.
If one of the co-owners died, their interest in the property would automatically pass to the remaining co-owner under the right of survivorship. This means that the deceased co-owner is unable to leave their property or any share it to anyone else except the other co-owner.
If the relationship breaks down and the property is sold it will be presumed that you both own the property equally, regardless of your respective contributions to the purchase price. This could lead to difficulties if one of the co-owners believed they should be entitled to more of the sale proceeds as a result of their original contribution. Further disputes may arise if both co-owners wish to remain at the property after a separation, but they cannot find a resolution.
Although there can sometimes be difficulties with holding the property as joint tenants, it is generally the simpler of the two. This is because it doesn’t require working out exactly how much each party contribute to the purchase price and each party would simply hold an identical legal interest in the whole property.
Tenants In Common
Holding the equity in the property as tenants in common can help couples bring more clarity to the situation as each of the co-owners will own a specified share in the property. For example, one party might have made a larger contribution to the purchase price and wants recognition for this. Therefore, you will need to consider whether each person’s share will be fixed from the outset (for example there might be a 60%-40% split) or whether the shares will vary according to the financial contributions made by each person during your ownership of the property.
When one of you passes away, the survivor(s) cannot sell the property without appointing another co-trustee. The proceeds of the sale will be divided, and the deceased owner’s share would then pass in accordance with their Will or the intestacy if they died without leaving a valid Will. If couples want to go into more detail beyond the percentages, they can use a Declaration of Trust or set this out in their Will.
What To Do?
Whichever option you choose, it’s important to have an upfront and honest conversation with each other. In certain circumstances it is advisable for you both to receive independent legal advice, for example when you are making unequal contributions towards the purchase price or because there is an actual or potential conflict of interest. You should start thinking about joint ownership early on in your transaction so that you can reach an agreement and/or take independent legal advice if required.
How Can Timms Help?
If you have any questions regarding this blog or any other conveyancing matters, please do not hesitate to get in touch. You can contact me via e-mail at c.ball-wood@timms-law.com or via phone on 01283 561531. Alternatively, you can visit the conveyancing page of our website here.
April 2022