If you are buying a property with someone else, whether it’s a spouse, friend or business partner, it is important to understand how your ownership is set up from the outset.
In this blog, Tasnim Tirech, Trainee Solicitor from our residential property team, explains the difference between owning a property as joint tenants or tenants in common, and why choosing the right option can make a big difference if your circumstances change.
Joint Tenants
Joint tenancy is often chosen by married couples and civil partners. With this arrangement, each owner has equal rights over the whole property regardless of how much they have individually contributed to the property.
The main Feature of joint tenants is the right of survivorship. This means that if one owner passes away, their interest in the property automatically transfers to the surviving owner. This can give couples reassurance as it makes the probate process simpler.
Tenants in Common
Tenants in common works differently. Each owner holds a separate share in the property, and those shares can be equal or unequal. This option can be useful for friends, business partners, or couples who are contributing different amounts. This can be enhanced using a Declaration of Trust, which sets out how exactly the property is owned. For example, it could set out contributions as 40% and 60%, protecting your individual shares in the property.
Another feature of Tenants in Common is that, unlike Joint tenants, there is no right of survivorship; each owner can transfer or leave their share to someone else in a Will. This is useful for business partners or blended families. Tenants in common also have the right to sell their shares of the property without the permission of the other owner. This differs from Joint tenants, who need a unanimous decision to sell their property. This is a major advantage as it enhances the flexibility of property ownership.
An Example of Tenants in Common Benefits
This can be particularly important for blended families. For example, if a husband and wife own a property as joint tenants and the wife dies first, her interest will automatically pass to her husband under the right of survivorship.
If the husband later dies and leaves the property only to his own children in his will, the wife’s child from a previous relationship may receive nothing from what was originally her share.
By contrast, if the property is owned as tenants in common, the wife can leave her share under her will to her child, helping to ensure that her intended beneficiary is protected.
Need Advice on Joint Property Ownership?
Taking advice at the outset can help make sure your ownership reflects your intentions and avoids disputes later on. If you would like advice about buying a property jointly, declarations of trust, or property ownership arrangements, please get in touch. To speak to our friendly, experienced, professional property team today, please call 0330 175 5655 or email info@bglaw.co.uk.
You can also read our previous article, ‘Living Together but Not Married? The Cohabitation Rights Every Couple Should Know’ for related information.
