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Joint tenants or tenants-in-common?

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When buying property jointly with another person in England and Wales an important decision is whether to hold as joint tenants or tenants-in-common.  Careful consideration should be given to such a decision and will often depend upon the particular circumstances of the case and the relationship between the parties.

Joint tenants

Joint tenants own a property jointly with no reference to “shares”; together they own the whole property. The particularly important factor is that joint tenants enjoy a “right of survivorship” by which the surviving party of a joint tenancy will own the whole of the land. This stands irrespective of what might be expressed in the deceased’s will; the property will not be included in the estate as it will pass to the survivor(s).

Tenants-in-common

If two or more people own a property as tenants-in-common, they will own their beneficial interest independently of the other owner(s). That is to say that, upon the death of one tenant-in-common, their share (whether equal or unequal) will be dealt with in accordance with their will or, if they did not make a will, the rules of intestacy. The beneficiary under the will or intestacy rules will then step into the shoes of the deceased tenant-in-common and take over their share along with the other tenant(s)-in-common.

In addition, a tenancy-in-common can be in equal or unequal shares.  The division of shares should be documented by way of a separate deed of trust which would remain "behind the curtain" i.e. the private knowledge of the parties. This agreement might reflect the price each party contributed to the property, their share of the mortgage repayments or any other arrangement between the parties as is agreed.

Which should you choose?

The choice of joint tenancy or tenancy-in-common will very much depend on the circumstances and relationship between the parties. For example, married or co-habiting couples will usually intend for the property to devolve automatically to their surviving spouse or partner, in which case a joint tenancy would be the most suitable option. However, in some cases where a couple have children from a previous relationship they might want their share of that property to form part of their estate, in which case a tenancy-in-common would be appropriate. Individual wishes would also need to be set out in a will, to ensure that their share would be dealt with accordingly and not just by the usual rules of intestacy.

If the parties are friends or business partners, a tenancy-in-common might be the most appropriate option. This would enable the parties to decide between them the size of each share and should be documented by way of a deed of trust, as described above.

The above said, each case will very much depend upon the individual circumstances and requirements of the parties and bespoke advice should be sought as to which option might be best for you.

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