Bharbhage Singh

Senior Legal Assistant

Wills, Trusts and Probate


Home ownership: Joint tenants v Tenants in common

Bharbhage Singh

Understanding joint tenants and tenants in common

“Joint tenants” and “tenants in common” are both terms that refer to how owners of a property hold the beneficial interest in it. It is important to understand the difference between the two as they might have different implications for you and your family. 


If a property is held as joint tenants then both owners will hold the property equally and if one of the owners were to die then that owner’s share would automatically pass outright to the other owner. This is known as the ‘right of survivorship’ - married couples often hold property in this way and so as to give simplicity on the first death.

If a property is held as tenants in common then the right of survivorship does not apply  - instead the ownership on the first death will pass according to the terms of the will of the deceased owner (or, if there is no will, according to intestacy rules). Tenants in common also are not necessarily regarded as equal owners ie they can each have different percentage ownerships in the property.

Some reasons why joint owners might choose to hold property as tenants in common include:

 

  • if they have made different financial contributions towards the property
  • if they have children from previous relationships
  • if protection is required from possible future events
  • if it is not desired that the surviving joint owner should inherit the entire ownership outright on the first death

 

If a property is held as tenants in common then it might be advisable to draw up a ‘declaration of trust’. A declaration of trust is a document which formally records how the property is held and can set out the respective shares belonging to each owner. It can also set out the agreed procedure to be followed if, at a later date, either of the owners should wish to sell the property  and the other does not.

 

It goes without saying that, whichever form of ownership is chosen, it is important that each owner understands how their share will pass in the event of their death and, if necessary, should review the terms of their will. It might be the case that each owner is happy to give the survivor of them a right to occupy the whole property after the first death has occurred, but at the same time, wishes to ensure that when both have died the ownership will definitely pass to nominated persons (typically children).


If that is the position it would be necessary to arrange matters so that the property is held as tenants in common and suitable provisions (eg creation of a trust) are included in wills. If that is the case then proper legal advice is certainly desirable.

 

If you are interested in any of the topics raised in this article, or for further information, then please call to speak to one of the team on 0115 9888 777.

 

 

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