When it comes to joint ownership of a property, you may think this is a relatively simple process. However, joint ownerships come with legal complexities that can be quite confusing. This is why it is important for you to familiarise yourself with them before signing on the dotted line.
Joint ownership: joint tenants or tenants in common
Whether a property is a leasehold or freehold, it can be owned by two or more people as either joint tenants or tenants in common. These are not necessarily the same thing, so knowing which joint ownership arrangements suits you is essential before you register the property with the Land Registry.
Joint tenants have an equal share of rights to an entire property. If one person dies, the other automatically inherit their share of the property, making them the sole owner. A joint tenant cannot pass on their half of the property to another person in their will.
Tenants in common
Tenants in common, on the other hand, do not necessarily own equal shares in a property. One person could own 60 per cent and the other could own 40 per cent. In the event of one person dies, their share will not be automatically handed over to the other person. This share can be passed onto another person in their will if they wish.
Declaration of trust
When buying a property with a partner or someone else, you solicitor will draw up what is known as a ‘declaration of trust’. This will clarify whether you are both joint tenants or if you are tenants in common. This is important as it will make the selling process later on in life a lot easier.
Tenants in common can choose to become joint tenants along the line if they wish, and they often do. This normally happens as a result of certain circumstances such as getting married. Similarly, joint tenants may choose to become tenants in common as it can offer more flexibility if they choose to end their relationship or part ways in another manner. However, be aware that this does not have to be done by mutual consent. One joint owner can serve what is known as a ‘notice of severance’ on the other person.
If an individual already owns a property, they can transfer ownership into joint ownership. This can be done as either joint tenants or tenants in common. This commonly occurs when couples move in together.
It should always go without saying, but you should always seek expert legal advice when it comes to the joint purchase of a property. This will allow you to understand the various joint ownership options before making a final decision.
Knowing where you stand
Many couples have lived together for many years without knowing whether they were joint tenants or tenants in common. However, it is important for you to know which one you fall under so that you know where you stand and what your options are if you face unforeseen developments in the future.
Find the perfect joint property with Joules Estate Agents
There are many things to think about when it comes to joint ownership of a property, but this does not mean you should let it interrupt the excitement of finding the perfect place. At Joules Estate Agents, we can help you find the perfect property in the Heaton’s, whether it be for you and your partner, to rent out or anything else. Get in touch to find out more.