Joint ownership – Joint Tenancy or Tenants in Common?

Joint Property ownership is very common in the United Kingdom, especially between two people. There are two different ways in which you can jointly own a property – ‘Joint Tenancy’ and ‘Tenancy in Common.’  They are very different from a legal perspective, and if you own a property jointly with another, it is essential to know how you own it.  It is possible to sever a Joint Tenancy, which turns it into a Tenancy in Common, so don’t panic if you are holding property the wrong way!  This can be rectified.

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Joint Tenancy

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Joint Tenancy is the default way in which two or more people will jointly own a property.  Joint Tenancy means that each of the owners jointly owns the whole of the property, rather than a defined share each. Unless a Deed declaring a Tenancy in Common was made when the property was acquired, it will be held as Joint Tenants.

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Joint Tenants inherit the property under the ‘rule of survivorship’. This means that the property will automatically pass to the other owners should one owner die, rather than passing to the person entitled to the deceased’s estate through a will or intestacy rules.

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If you would want your share in a property to pass to someone other than the co-owner, you need to sever the tenancy in order to be able to leave your share under the terms of your Will.

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Tenancy in Common

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Tenants in Common each hold a distinct share in the property. These shares do not have to be equal. In practice we most often see this if one owner puts more money into the purchase of the property than the other, but there are other reasons such as if property has been inherited by siblings who would wish to pass their share to their descendants rather than to each other.

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The rule of survivorship does not apply in Joint Tenancies. Tenants in Common can choose whether to leave their shares to each other or to another person in their will.

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Severing a Joint Tenancy

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Severance of a Joint Tenancy can happen automatically in certain circumstances, although these are relatively unusual. For example, if one of the owners is declared bankrupt, or murders a joint owner, this automatically turns a Joint Tenancy into a Tenancy in Common. Usually, though, it is made by the decision of one or all of the owners.

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One owner can choose to sever the tenancy without seeking agreement, by serving a notice in writing. The most common reason for this is due to a separation, either of an unmarried couple or of a married couple who are not yet divorced.

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If you need to sever a joint tenancy, we can formalise this for you – any of our offices can assist with this so please check our website for your nearest office.  It is not necessary to attend the office for this, so we can assist even if you are not near one of our offices.  Please contact us for more information.