How should we hold the property?

Julie Crowder Barr, Associate Legal Executive at our Attleborough Office, discusses what to consider when buying a property jointly with someone else. 

Julie Crowder Barr - Associate Legal Executive at Spire Solicitors LLP
                  Julie Crowder Barr

When buying a property jointly with another person, you need to think about how you wish to hold the property.

There are two types of ownership – joint tenants and tenants in common.

Although these terms use the word ‘tenant’, you are still joint legal owners, the way you choose to hold your respective shares simply determines the way the equitable ownership will be split.

Joint tenants means that you both own 100% of the property and so upon the death of one owner, the whole property automatically passes to the other, regardless of what is written in your will.

Tenants in common means that you each hold specified shares. You can hold it 50/50 or in unequal shares, it is entirely dependant on your own situation. If the property is held in this way, it is imperative that you have a will setting out who you want to inherit your share of the property, otherwise your share will pass in accordance with the intestacy rules, and the person you want to inherit may well not be your legal next of kin.

If you wish to hold the property as tenants in common in unequal shares, a separate Deed of Trust can be drawn up setting out each person’s shares, obligations and contributions.

If you initially choose to hold the property as joint tenants, the joint tenancy can be severed at a later date if your circumstances change by sending a signed notice to the other owner or through a person’s actions suggesting that severance has taken place. You will then hold the property as tenants in common instead.

Things to consider before deciding how to hold the property, include the value of your whole estate for inheritance tax purposes, any children from previous marriages, the contributions made by each person to the initial purchase, whether or not you have a valid will, who you want the beneficiaries of your estate to be.

Both legal owners need to consider their own position, and then agree together on how they will hold the equitable interest. This will then be noted on the Transfer document which is sent to Land Registry to avoid any dispute later on.

We are more than happy to discuss your individual circumstances with you in order to help you come to a decision or alternatively, you can download the Land Registry and Law Society’s joint Practice note which is available on the Law Society’s website.