Co-Ownership of Property

How do you Jointly Own your Property and Why Does it Matter When you Die?

When you buy a property, you may be buying it with someone else and you become co-owners as a result.

There are two different ways to jointly own property, being either “Joint Tenants” or “Tenants in Common”.

Despite the word “tenant” being associated with property rental, in relation to property ownership, this means that you are both an OWNER of a property.

It is often the case that married couples/civil partners own their property as Joint Tenants, and this is often beneficial if you want the other co-owner to own 100% of the property if you were to die before them. However, if your co-owner is NOT the biological parent of your children, then this form of ownership will effectively disinherit your children from your share of the property if you die before your co-owner.

By owning a property as “Tenants in Common” AND having a valid Will, you can then elect for your share of a property to pass to your children rather than the surviving co-owner.

What is the difference?

Joint Tenants

Both you and your co-owner own 100% of a property simultaneously. This is not to say that there is 200% of the property, but that both parties are treated as having the total ownership of the property. If one co-owner died, then by law the survivor would automatically become the sole owner as a result.

If the first co-owner to die wanted to give their “share of the property” to someone other than the surviving co-owner, this would fail as the law of Survivorship overrules the wishes contained within a Will.

Tenants in Common

You and the co-owner of a property will usually (but not always) own an equal share of a property. However, this format of property ownership is much more flexible than Joint Tenancy as it also allows for people to own a property in unequal shares. This can be beneficial after your death for various reasons including (but not limited to) the protection of your share of a property for your children rather than a new spouse and minimizing care fees costs for your surviving co-owner.

What if I want to change from one to the other?

Thankfully, there are ways in which this can be done that will allow you to free up your share of a property so that you have control over it. The most common transition would be from Joint Tenants to Tenants in Common. This would likely be done for the reasons mentioned in the previous section, often allowing for more strategic control over your assets, particularly in the event of your death.

How is this done?

Changing from Joint Tenants to Tenants in Common is achieved by carrying out a qualifying act of severance. This can be a formal Severance Notice either between the owners (mutual agreement), via mutual conduct, or can be done unilaterally (by one co-owner).

For further guidance without fear of consultation fees or obligation, please visit TRFWills.