Joint Tenants or Tenants in Common
- If you both own the property as Joint Tenants, both of you own all of the property – neither of you are entitled to a separate part.
- The Joint Tenancy gives a “right of survivorship”. This means that if one of you dies, the property automatically passes to the other surviving Joint Tenant. No part of the property belongs to the estate of the person who has died.
- This automatic right makes this method of co-ownership attractive to people who are married.
- If one of you dies and the other re-marries, the survivor could transfer the property into joint names as Joint Tenants. It is possible that any children from the previous relationship may be left without any claim to the property or proceeds of sale.
Tenants in Common
- If you own the property as Tenants in Common, each of you holds an agreed proportion of the property, for example 50:50, 40:60 or any other agreed proportion.
- Your part can be transferred either during your lifetime as a gift, or on your death by your Will or intestacy (where there is no Will). In this way you can deal with different contributions each of you make to the purchase price.
- If you separate, the property cannot be sold without both of you being party to the Contract and Transfer.
- If you decide to be Tenants in Common, you will need to discuss and decide in what proportions you wish to hold the property.
We can prepare a document called a Declaration of Trust to record unequal contributions to the purchase price. It can also record, for example, unequal contributions to mortgage payments and your intentions in the event of a breakdown in your relationship.
Without this Declaration of Trust it could be left to the courts to decide the extent of each of your interests in the property, unless you can agree this between you at that time.
The Court can also make an order as to who should occupy the property should your relationship breakdown. If you are not married then a Declaration of Trust is of particular relevance and we must also advise you to seek independent Legal advice to consider whether you should enter into a Cohabitation Agreement.