Property ownership

Joint owners can either own property as beneficial Joint Tenants or as Tenants in Common. So, what's the difference? Chances are that if you didn't specify at the time you bought your house, you will most likely own it as Joint Tenants.

In either case, you both need to sign to sell, let, or mortgage the property. The differences arise if owners fall out or if one owner dies.

Joint Tenants

With a Joint Tenancy, each party named as an owner in the deeds has an equal share of the property. If one owner dies, their share passes automatically to the other, regardless of what their Will says. This is the most common way for married couples to own houses. The survivor just needs to produce the death certificate, and the property, with any mortgage, passes to them. If you both die, perhaps in the same accident, then the house will pass under the Will of whoever lived longest, no matter how short the period (although if it cannot be confirmed who died first, the law assumes that the eldest did). If there is no Will, the house passes by the intestacy rules.

Tenants in Common

With a Tenants in Common arrangement, the property is owned by those named in the deeds in distinct, not necessarily equal, parts. This means that the individual owners can control what happens to their share when they die, which may mean that the survivor does not inherit the rest of the house. If this is the case, they might have to come to an agreement with the family of their co-owner.

However, you can create a trust in your Will that allows your co-owner to continue living in the house for the rest of their life, whilst ensuring that your share passes to your preferred beneficiaries on their death. Trusts can also help to reduce inheritance tax, providing your share in the property passes under your Will, and can protect your claim from nursing home fees, second marriages, bankruptcy, or stepchildren. If you own your property as joint tenants and want to add a trust to your Will, it may be necessary to sever the tenancy first. If required, My Will Expert will complete this as part of the process of forming the trust.

You may decide to own the property in unequal shares, to protect a greater contribution by one party or to equalise your estates for tax reasons. You can also enter into a living together agreement to decide what should happen to the house if you split up, or to highlight that the mortgage will be paid by one of you and come out of the other’s share when the house is sold.

In either case, it is sensible to have a Will in place to ensure that you are happy with the way your property will be handled if you were to pass away before your co-owner. My Will Expert can provide professional guidance to avoid any unwanted actions being taken, such as your share in the house passing to one person with the insurance you have taken out to pay the mortgage going to someone else.