Joint Ownership of Property

In this blog, I look at joint ownership of property.  It is important to understand the distinction between joint tenants and tenants in common as it can have significant implications particularly on the death of an owner.  Please see my notes at the end of this blog in the sections headed “Other issues Joint Ownership of Property” and “Disclaimer”.

What is Joint Tenancy and Tenants in Common?

Joint Tenants

Under a joint tenancy, all of the owners are entitled to the whole of the property.  The key feature of a joint tenancy is the right of survivorship – on the death of one owner, his or her share will automatically pass to the survivor(s).

Tenants in Common

The other type of joint ownership is called tenants in common.  Tenants in common each own a distinct beneficial share in the property.  On the death of one owner, his or her share will pass in accordance with his or her Will or, if there is no Will, under the law of intestacy.  The share can be left by Will to the other owner(s) or to anyone else.  There is no right of survivorship here, in contrast with the position under a joint tenancy.

Joint tenants can only have equal interests in a property, whereas tenants in common can own a property in different proportions.

What is the Difference Between Joint Tenants and Tenants in Common?

Implications

For joint tenants, the right of survivorship means that, on the death of one owner, no action is required to vest the property in the surviving owner(s), who is/are already entitled to the whole of the property.  A joint tenancy is more common where spouses are concerned.

A tenancy is common provides greater flexibility for the purposes of estate planning.  This does, however, assume that the tenants in common have professionally drawn Wills and that careful consideration has been given to how their interests in the property will be dealt with when they die.  I recommend that decisions are not made on this issue until legal advice has been taken.

Converting to Tenants in Common

Converting from joint tenants to tenants in common is called a ‘severance’ and involves one joint tenant giving notice to the other(s).  The register of title for the property will then have to be amended.  However, no Land Registry fees or Stamp Duty Land Tax will be payable for this.

Other Issues of Joint Ownership of Property

It is normally advisable for co-owners to take legal advice on the terms of their ownership, which can be set out in an agreement (a Declaration of Trust).  This could include provisions relating to ownership shares, responsibility for any mortgage, payment of other outgoings and what should happen if one owner wishes to dispose of his or her share.

Disclaimer

This blog is written as a general guide.  As any course of action must depend on your individual circumstances and you are strongly recommended to obtain specific legal advice before you proceed.  I do not accept any responsibility for action which you may take as a result of having read this blog.