There are many words, terms, and phrases to remember when you buy a property, so it’s normal to feel confused and overwhelmed. If you’re purchasing with someone else, one of the most crucial legal decisions is choosing the type of property ownership – joint tenants or tenants in common.
Although you might want to focus on the excitement of the moment, the opportunities for the future, or even how you’ll decorate, your choice of property ownership can significantly impact your future finances, inheritance rights, and even relationship security.
Find out the differences between joint tenants and tenants in common, the legalities of each type, and how it affects factors like inheritance, Wills, and deeds of trust.
How to find out if you’re a Joint Tenant or Tenants in Common
If you’ve already bought a property and are unsure what type of ownership you have, the simplest way to determine how you and your spouse own any property is to obtain the office copy entries to the title of your property or properties. You can do this by contacting the HM Land Registry in England and Wales.
What do ‘Joint Tenant’ and ‘Tenants in Common’ mean?
A breakdown of Joint Tenancy
- Each of you has equal rights to the whole property.
- Up to four owners, not just pairs.
- If one of you dies, the ownership is automatically transferred to the surviving owners – regardless of what’s in your Will or even if divorce proceedings have started.
- You can’t pass ownership in your will.
- To avoid automatic transfer to the surviving owner (e.g. your spouse in cases of divorce), you can serve a Notice of Severance to convert the ownership to Tenants in Common.
A breakdown of Tenants in Common
- Each owner owns a separate share of the property, which can differ in size (not just 50/50).
- Popular with parents who want to help their children get onto the property ladder.
- You’re not restricted to handing over your ownership to co-buyers if you decide to sell your share.
- If one of you dies, their share passes according to their Will (or under intestacy rules if there’s no Will), not automatically to the co-owners.
So, what’s the difference?
Joint tenants means you both own the whole property together. If one of you dies, the other(s) automatically inherits everything – even if a Will says otherwise.
Tenants in Common means each of you owns a separate share of the property. If one of you dies, their share passes according to their will or, if they don’t have a will, via the intestacy rules, and not automatically to the co-owner.
However, both types of ownership require all owners to agree to the sale of a property.
FAQs about ownership tenancy
What are intestacy rules and how do they affect property ownership?
If someone dies without a valid Will, intestacy rules decide how their estate – their money and property – is distributed. Under the rules of intestacy, the absence of a valid Will means your spouse will receive the first £322,000 of your assets.
If you want to make sure your share of a home goes to a specific person, it’s essential to plan ahead. Wilkes can help you organise this.
What can you do to ensure someone else isn’t entitled to your property share?
To ensure that your spouse does not become entitled to your share in any property, in the event of your death, it will be necessary to carry out the following steps:
- Determine how you and your spouse hold your property and whether this is as Joint Tenants or Tenants in Common.
- If you hold your property as Joint Tenants, sever the tenancy to become Tenants in Common.
- Prepare a Will to determine where your share of your property will pass.
How do you convert from Joint Tenancy to Tenancy in Common?
If you already own the property as joint tenants and want to convert to tenants in common, you need to prepare a notice of severance.
If you are in the process of buying a property and want to own the property as tenants in common, make sure that you make your residential conveyancer aware of this. You can also have a Declaration of Trust, which sets out what proportion of the property each tenant owns.
How can Wilkes help with property ownership issues?
Whether you’re buying your first property or reviewing an existing arrangement, Wilkes can help align your assets. If you have any questions or would like any advice in relation to the above, please contact Grace Hallam at [email protected] or 0121 710 5811.
