Joint Ownership of a Property

If you have joint ownership of a property or are considering buying a property with someone, it is really important to know how you want to be registered as joint owners and understand the type of joint ownership you have.

You may expect co-ownership to mean you are equal co-owners, but that is not always the case, and it is important to understand what the type of ownership of property means, your share in the property, and what happens if a joint owner dies.

Joint Tenants vs. Tenants in Common

Co-owned property can be owned either as:

• Joint Tenants – each owner is deemed to own the property wholly, and have equal rights to it and therefore equal ownership of 50/50 – importantly, this cannot be held in unequal shares; or
• Tenants in Common – each owner of property has their distinct share, which can be held in equal or unequal shares, such as a 70/30 split.

What Happens When a Joint Property Owner Dies?

The answer depends on whether you are Joint Tenants and Tenants in Common, and whether the right of survivorship applies.

With Joint Tenants, if one owner passes away their share automatically passes to the other owner as the “survivor”. This is regardless of what the Will of the deceased joint owner says. With Tenants in Common, the share of the deceased owner passes in accordance with their Will, or if no Will, in accordance with the Intestacy Rules.

This has several important implications, including:

• If you want to leave your share in a property to your co-owner on death, it is best to ensure you are registered as Joint Tenants, so this happens automatically, avoiding the need for a Grant of Probate.
• If you are the surviving owner as a Tenant in Common, and your co-owner has left their share in the property to someone else, you could face a dispute with the newly entitled co-owner, or face a claim from them requiring the property to be sold

Impact on Separation

If you and your partner co-own property as cohabitees, whether you are Joint Tenants or Tenants in Common will be key in ascertaining your respective entitlement to equity.

If you are Joint Tenants, the presumed position is 50/50 beneficial ownership. If you are Tenants in Common your respective shares should have been decided when you purchased the property, or set out in a Declaration of Trust.

If there is a dispute over someone’s share in a property, they can ask the court to declare their interest under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). TOLATA can also be used to seek a court order for the property to be sold if one co-owner refuses a sale (read more about TOLATA in our web page here).

Can I Change the Joint Ownership of Property?

Yes – however, the situation differs depending on what you are changing to, and from.

• If going from Joint Tenants to Tenants in Common, all that needs to be done is serve a ‘Notice of Severance’ on your co-owner and apply to the Land Registry to have a Tenants in Common restriction entered on the property title, preventing one joint owner from being able to sell the property alone. This can be done by one co-owner without the consent of the other. If a Joint Tenancy is severed then, unless there is an agreement to the contrary, severance will usually lead to a Tenancy in Common in equal shares, irrespective of the original contributions to the purchase price or the party’s intentions. This will be deemed determinative if a TOLATA claim is made by a joint owner at a later date and so it is really important to agree shares with the other joint owner and property document them in a Declaration of Trust.
• Going from Tenants in Common to Joint Tenants cannot be done by one joint owner and you need all co-owners’ agreement.  You would then need to notify the Land Registry of this desire to be Joint Tenants and ask that they remove the Tenants in Common restriction on the title.

If you are Tenants in Common, it is also possible for the shares as Tenants in Common to change over time. Whilst a Declaration of Trust will be deemed conclusive for the beneficial ownership of a jointly owned property, this express declaration can be varied by subsequent agreement or be affected by proprietary estoppel – being a promise on which another person has relied.

If there is no Declaration of Trust, then unless all the joint owners agree, the Court will have to decide the share of each owner.

It is therefore important to make sure that you have the right sort of joint ownership and that, if you  are tenants in common, that the share of each owner is properly recorded.

Contact Us

If you would like further information on how you jointly own property and the impact on your personal affairs, Daisy Tester is happy to assist you. Daisy is Head of Contentious Probate and Estates and deals with disputed Wills and Estates and TOLATA disputes about jointly owned property.

Unsure whether you’re Joint Tenants or Tenants in Common? Or wondering which option is best before entering joint ownership? We’ll be happy to help. Give us a call on 01273604123 and we’ll review your situation together. You can also contact us by email at enquire@bbc-law.co.uk or by make an enquiry.