When buying a property as a couple, perhaps a first home together, you have many things to worry about and consider. You have probably viewed many properties and disagreed about various things and finally you find one which suits both of you. Your offer is accepted, mortgage agreed and you have instructed your solicitor. Fairly early on in the process, your solicitor or conveyancer will ask you how you would like to own the property. As ‘Joint Tenants’ or ‘Tenants in Common’. It is not something you will likely understand in its entirety but it is important to make an informed decision and know the essential differences.
The defining feature of a Joint Tenancy is that you will own the entire property as equal partners, you will each own 100% of the property. If you wish to hold the property in specific shares, for example one if you is contributing more to the purchase, or wish to leave your share to someone other than your partner on your death, you will need to hold the property as Tenants in Common.
When owning the property as ‘Joint Tenants’ the main appeal to most is generally the rule of survivorship. Should one of you pass away, the entire property is automatically transferred to the survivor. As Joint Tenants you will be unable to leave your share of the property to anyone other than the person you own it with. It is favourable for some to do this as it can prevent creditors after your death from having a claim in your property. However, in other cases, such as business partners buying a property as an investment, they will be unable to pass their separate shares in the property to their families, as the survivor would own the property following the death of the first.
Although unlikely, you may also need to consider the consequences of the death of Joint Tenants simultaneously, when the order of death cannot be ascertained. In this case it is presumed that the younger survived the elder. This would mean that the property could be regarded as being owned by the younger and passed in accordance only their wishes, by their Will or intestacy.
If Joint Tenants does not suit your needs, you can own the property as Tenants in Common in either equal or unequal shares. The rule of survivorship does not apply when owning the property as Tenants in Common and you can therefore leave your share of the property to whomever you wish under your Will.
Owning the property as Tenants in Common allows you to own unequal shares in the property. This might suit you if you contributed unequally to the purchase and want to ensure the proceeds of sale are divided in the same way. It also allows you to pass your share of the property to others in your Will in the event of your death.
It is important to note that if you wish to own the property in unequal shares, the absence of an express declaration may result in part or complete loss of one party’s beneficial interest (the default position will be 50/50). It is, therefore, important to ensure that you create a Declaration of Trust detailing your shares in the property.
Matthew joined the residential property department at Bates Wells & Braithwaite in 1986.
He studied geography and environmental science at the University of Manchester before returning to Suffolk where a change in direction saw him join the firm.
He is well known to local landowners and devotes much of his spare time to conservation issues having worked in the past for Groundwork Trust and Suffolk Wildlife Trust. He also enjoys walking, travelling and photography in his spare time.