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Co-ownership - Niki Christopher, Chebsey & Co

Co-ownership - Think before you buy

A property (whether leasehold or freehold) owned by two or more people is held either as joint tenants or tenants in common. These terms are often misunderstood. This article explains what these terms mean and will hopefully help you decide which method of ownership is right for you.

Joint Tenants
Where two people own a property as joint tenants, they own it as a whole between them; they do not have distinct shares. If one of the owners dies, their share in the property will automatically pass to the survivor, regardless of whether the deceased has left his or her share to someone else in a Will.

Tenants in Common
Where two people own a property as tenants in common, they can own different percentages. For example, one party may own 75%, and the other the remaining 25%. This may be appropriate where a couple have contributed different amounts towards the purchase.

Each owner is free to deal with their respective share in the property as they wish. If one were to die, their share will under the terms of their Will (or, where no Will has been made, in accordance with the intestacy rules); it will not automatically pass to the other owner.

Which form of ownership should you choose?
Which form of ownership to choose depends on your particular circumstances.

A married couple, or a couple in a civil partnership, usually choose to hold property as joint tenants so that it will pass automatically on death to the other.

However, if one party has children from a previous relationship, and if they wish to make provision for their children to inherit their share on death, then it would be essential to hold the property as tenants in common as property held under a joint tenancy cannot be gifted by Will.

Severing the Joint Tenancy
You can change a joint tenancy to a tenancy in common by a procedure known as severance. This is a simple process by which one co-owner notifies the other in writing of their wish to sever the joint tenancy. Notification of the severance must then be sent to the Land Registry.

The consequences of severance must be considered carefully. If you still live in the property and choose to sever the joint tenancy, the death of your partner could mean that you are prematurely forced to sell the house. You will not automatically receive your partner's share in the property should he or she die in the same way you would have done had the joint tenancy been preserved.

Equally, if a relationship breaks down and the property was held as joint tenants, it is usually advisable to sever the tenancy immediately to ensure your ex-partner does not inherit your share if you die.

If you are buying property as co-owners, think carefully about the future implications of how you hold that property.

Niki Christopher

Niki Christopher works in the Family department of Chebsey & Co.

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