Tenants in Common or Joint Tenants – which one is for us?
When purchasing a property with another person, it is important to consider if you will be joint tenants or tenants in common. The type of ownership directly affects what you can do with the property if one of the owners dies or if the relationship breaks down.
Joint tenants have equal rights over the entire property meaning the property will automatically go to the other owner should one party die. By choosing joint tenants, it also means you cannot pass on your ownership of the property in your will.
Tenants in common means that the parties can own different shares of the property. More importantly it also means that the property does not go to the other party automatically if you die. You can state in your will who you wish to pass your share of the property onto or perhaps use a trust arrangement to protect the co-owner and your family.
You can change the type of ownership at any point. For example if you own a house with a spouse who you wish to divorce, you can transfer to tenants in common to allow your share to be left for someone else. Likewise, if you were to marry, you may wish to switch to joint tenants to give you both equal rights to the property. You can also change to or from sole ownership at any time, with agreement of the other party.
With the housing market still booming, we have seen a spike in properties being bought by friends or relatives who would naturally want to protect their share for their immediate loved ones. Our team can talk through all the options so you can make an informed decision before signing the paperwork.
Separately, we have also seen an increase in couples purchasing a property where one is paying substantially more for the deposit than the other, whether that be from family contributions or savings. Our Solicitors can also help guide you through this process and draw up a declaration of trust should this be necessary to give all parties piece of mind when making such a large and significant purchase.
It is always sensible to consider preparing or reviewing your will when considering property ownership.
If you would like to speak to us about co-ownership of property please contact Michele Walters on 01603 675644. If you would like to discuss declarations of trust or wills please contact Laura Rumsey on 01603 675645