Provisions as to Joint ownership

When two or more people purchase a property, there are two different ways in which the property can be held.

It is an important decision to make and how you decide will be influenced (for example) by whether you are married, are making different financial contributions to the purchase price and if you have children from previous relationships.

The first way is to purchase is as joint tenants which results in all co-owners owning 100% of the property and their ownership is assumed to be equal, regardless of financial contributions. When the property is held as joint tenants, there is a right of survivorship. This means that on the death of one of the co-owners the property automatically passes to the survivor and the deceased will is not relevant.

The second way to purchase is as tenants in common which results in each joint owner having a share or percentage of the property.  The property can then be held equally (50:50) or in any unequal proportions as agreed by the parties that might reflect financial contribution but need not. We find that as parents and grandparents are now regularly making contributions towards deposits parties are often holding the properties in shares to reflect the uneven contributions by one family. With tenants in common there needs to a declaration as to what the respective shares of the joint owners will be. Holding the property as tenants in common (very importantly) also differs from joint tenants as there is no right of survivorship. This means that on the death of one of the co-owners, their share will pass by either the terms of their will or under the laws of intestacy. It is a common situation that couples have children from previous relationships. If the natural parent dies first and the property is held as joint tenants, the property passes completely to the surviving owner, potentially disinheriting children. It is wise to consider holding the property as tenants in common and making will provisions dealing with the deceased’s share in the property but also, possibly rights of occupation for the survivor.

There is currently a case going through the Central London County Court brought by a woman who lived with her partner for 18 years who is challenging the fact that his share of their home passed to his estranged wife when he died. The property was held as tenants in common, which means that his share of the house did not automatically transfer to his new partner. The man did not divorce nor did he update his will to reflect that he was in a new relationship for almost 20 years. It is a case that demonstrates the importance of keeping your will updated to reflect changes in your life.

We send a form out to all clients purchasing jointly, explaining all the above and we are also happy to discuss individual needs in respect of declaration of trusts and advice on keeping your wills up to date.

If you currently own your property as joint tenants and may wish to consider changing to tenants in common, and we can assist with notice of severance of joint tenancy, amending details at H M Land Registry and discuss will provisions.