Joint Tenants v Tenants in Common

Joint Tenants vs Tenants in Common. Buying a property is one of the most important steps that many of us take.  When you are buying a home with someone else, a key decision is how you should own the property.

Joint tenants vs tenants in common?

Your choice, perhaps after discussing this with your legal adviser or solicitor, is likely to depend on several different factors, including your own situation and the relationship that you have with person buying with you. It might be possible to alter the way that you own your property further down the line, but it is better to make the right decision now. This will avoid additional cost and difficulty.

Joint tenants vs tenants in common – does it matter?

Well, maybe a more pressing question is “when” does it matter. There are times when the way in which you own your property with another person can make a big difference. For example:

• When selling your property
• If a co-owner dies
• If the relationship between you and the person you are buying with comes to an end

Joint tenants

The thing to know about a joint tenancy is that you will own the property equally with whoever you are buying it with. Joint tenants is a popular choice where a property is being purchased together with a relative or someone, you are in a relationship with.

There is no joint tenancy agreement, there is no need for any document. This can reduce the amount of work involved in the transaction. However, it can also be disadvantage, as it does not allow for unequal ownership. For example, if one owner has been responsible for say 80% of any costs, they still only own 50% of the property.

Selling the property requires both parties. If you want to sell a property you have purchased as joint tenants, then all sales documents need to be signed by both people. If the two people cannot agree it may be necessary to obtain a court order.

Tenants in common

When you buy a property as tenants in common it is possible for both parties to have a different ownership share in the property.

Ownership shares can be defined in proportion to contributions. You do not have to hold an equal interest in a property, ownership percentage can be defined for each person. The percentage owned is usually based on what has put into the property, for example, in terms of financial contributions to the deposit or mortgage payments. There are no limits, and you can use any combination that works for you and your co-owner.

Tenants in common can sell their share of the property to anyone. There are no rules that prevent certain sales.

On death the property held by tenants in common does not automatically pass to the survivor. In fact, the share of the property owned by the deceased co-owner will pass to their estate. As a result, tenants in common who want to transfer a share of the property on their death need to leave a Will that sets out who that share should go to.

We have more guides available for first time buyers, home buyers, remortgages and buy to let.