How to protect yourself and others when purchasing a property with someone.
Joint Tenants and Tenants in Common: If you are purchasing a property with someone else, it is important to consider how you will own that property. In our latest blog post, Lois Stubbs discusses the ways in which you can protect yourself and others when buying a property with someone else.
Your decision will depend on a variety of factors such as your relationship with the other purchaser(s), your family setup and your financial contributions. If you are unsure which option is best for you, our experienced conveyancing team can assist you as part of the conveyancing process.
There are two ways in which a property can be owned by more than one person – Joint Tenants or Tenants in Common.
When you own as Joint Tenants, each owner will own the whole of the property equally and will not have a specific share. This means when you sell the property, each owner is entitled to an equal share of the proceeds regardless of their contributions.
When you die, your share passes to the surviving owner(s) automatically without being passed under a will. Therefore, you cannot specify who will inherit your share of the property
When you own as Tenants in Common, each owner will have a specific share in the property which may be equal or unequal.
Under this form of ownership, when you die your share of the property will pass as specified within your will or under the intestacy rules. It is a good idea to make a will to ensure that your property passes to those you wish to inherit as without a will, your property will pass to your relatives in a set order (known as the intestacy rules).
This is commonly used for unmarried owners or those in second marriages where they would like to leave their share of the property to someone outside of the relationship such as their children. It is also often used where one owner has made a larger contribution to the purchase price and would like this reflected in the shares that they own.
You can change your ownership from Joint tenants to tenants in common or vice versa at a later date, for example if your circumstances were to change due to marriage or divorce. This can be done by application to the land registry but we would recommend taking legal advice before making a decision.
To summarise, Joint Tenants own all of the property equally, meaning that proceeds will be split 50/50 by default upon the sale of the property. Upon Death, your share passes to the surviving owner(s) .This is commonly used for married couples with no commitments outside of the marriage. On the other hand. Tenants in Common have specified shares, this can be both equal or unequal shares. Upon the sale of the house, the proceeds will be split as per the shares agreed. Upon death, your share passes as specified within your will or under the intestacy rules. This is commonly used for unmarried owners or those in second marriages where they would like to leave their share of the property to someone outside of the relationship e.g., children. It is also a common approach where one owner has made a bigger contribution to the purchase price.
By Lois Stubbs