These days, a dream of owning a property very often comes with accepting a co-ownership.  Often a couple will buy a property together, however, there can be up to four people registered as the legal owners of the property. Your relationship with your fellow buyer will determine the way you would like to own the property. There are two ways in which you can hold a jointly owned property, one being owning the property as joint tenants, the other as tenants in common. The terms “tenants” stem from an archaic use of the word and have a different legal meaning to the type of a tenant who rents a property. 

Joint Tenants

If you own the property as joint tenants, you each own the whole property, meaning each has equal rights to the whole property, regardless of your respective contributions to the purchase price.  The main ‘selling point’ of this type of ownership is that on the death of one of the owners, the property automatically passes to the surviving co-owner(s), irrespective of the existence of any Wills.  This is known as the “right of survivorship”.  Married couples or civil partnerships commonly use this method of co-ownership, as the right of survivorship guarantees the property will go to the surviving co-owner on the death.

Tenants in Common          

There may be reasons to own the property as tenants in common, however.  If you hold the property in such a way, each of the co-owners own a nominal share in the property, which does not have to be equal. The share may be fixed at the outset or may vary depending on the financial contributions made by each person during their ownership of the property.  The main difference from the joint tenancy is that, as a tenant in common, you can leave your share of the property to whoever you choose in a Will, on your death. Your share does not pass to the other co-owner(s) automatically and should you not have a Will in place, the share will be transferred in accordance with the “intestacy rules” (i.e. rules and principles laid down by law, which stipulate how the estate of a deceased is to be administered if there is no Will).  Holding the property as tenants in common is typically used by friends or relatives who are buying a property together. 

Changing the type of ownership

If your circumstances change (e.g. divorce or marriage), it is possible to change your type of ownership from joint tenancy to tenants in common, or vice versa.  

Changing from joint tenants to tenants in common is called “severance of joint tenancy”, which can be done in a couple of ways; from the most formal one, by serving a notice under s36 without the other owner(s)’ agreement, to simply agreeing between each other.  You may want to, however, seek assistance of a solicitor, conveyancer or legal executive who will guide you to avoid any potential pitfalls.

Converting your tenancy in common into joint tenancy, however, requires the agreement of all the other co-owners.  In both cases, the change must be registered with HM Land Registry.  Again, you may want to instruct a solicitor in order to help you with the process.

Should you opt for a legal assistance in this matter, at DPM Legal, our property experts are familiar with the processes required and will be able to help.

Although every effort has been made to ensure that the information provided in this article is accurate and correct, the information provided does not constitute any form of advice, recommendation or opinion. DPM Legal Services Limited accepts no liability for any loss or damage, howsoever caused, as a result of any reliance on any information provided.

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