JOINT PROPERTY OWNERSHIP

When you purchase a property with another person or persons your solicitor will ask you how you wish to own the property.

There are two choices:

Joint Tenants or

Tenants in Common 

This is a very confusing subject and one that I am asked about frequently. It is important to make the right decision, as the information is recorded in the Transfer deed and will be enforceable in law.

If you imagine that the property you are buying is divided into 100 shares. You may want to own equal shares in the property or, if one of you is putting down more of the deposit, or paying a larger share of the mortgage, you may want to own the property in unequal shares. 

Joint tenants 

If you opt to own the property as joint tenants then you jointly own 100 shares in the property equally.

If one of you were to die, the property would automatically pass to the surviving owner. This is known as the “right of survivorship”. No Will is needed for the shares in the property to pass to the other joint tenant and a joint tenancy overrides any Will made to the contrary.

Joint tenants own absolutely equal shares of the property, meaning that if the property is sold, the net sale proceeds (i.e. money left after any sale costs and mortgages have been repaid) are divided equally amongst all owners.

If you opt for a joint tenancy ownership and later change your mind then you will need to ask a solicitor to sever the joint tenancy.

Tenants in Common 

If you opt to own the property as tenants in common you may decide on the division of shares between the property owners. The share division does not have to be equal and can be any share split that you agree upon.

If one of you were to die, the deceased’s share would not automatically pass to the surviving owner.

The deceased’s share would pass to their estate and be distributed according to their Will. If a Will had not been made, it would pass to their next of kin, in accordance with the rules of intestacy (i.e. how property is to be distributed where no Will has been made).

When the property is sold, the sale proceeds are divided according to the share of each owner and their share (after the costs of the sale and repayment of any mortgage) is paid according to the share that they own in the property.

Most property owners, who opt to own their property as Tenants in Common, will also enter into a Deed of Trust, which can be drawn up by your solicitor. This outlines in greater detail the agreement made between the property owners, as to how much each has input into the property, the value of their shares and what they will receive on completion of the sale.

As the firms of solicitors on the CMS panel are all conveyancing experts, they are able to advise you as to the merits and drawbacks of owning a property jointly and can also draw up a Deed of Trust for you, if one is required.

Sharon Buthlay

Property Lawyer and Director

CMS Ltd.

01638 576478