Buying a property with someone else – which type of joint ownership is right for you?
When you are buying a property with another person or people – be that a spouse, partner, friends or siblings – it’s important to make sure you think carefully about what kind of joint ownership option will work best for you, and taking into account all your circumstances.
The decision starts with a choice between buying as joint tenants or tenants in common. So, what are the key differences?
This means all owners own the whole of the property equally and do not have quantifiable shares.
On death: If one owner dies their share would be inherited automatically by the surviving owner or owners. Any share or interest in the property held by a ‘joint tenant’ cannot be left by them in their Will, nor will it be affected by the Intestacy Rules if no Will has been made.
On sale (or separation): It is presumed that all owners would share in any sale proceeds equally. This is regardless as to how any contributions to the property has been made.
- Married couples or civil partners who own property together often choose this option.
Tenants in Common
This means each owner does own a quantifiable share in the property. This could be 50/50 or 90/10 or otherwise the co-owners can decide how their shares should be calculated.
On death: If one owner dies their share would be inherited as provided for in their Will, or if none has been made, under the Intestacy Rules.
On sale (or separation): Each owner would receive their agreed share in the property’s proceeds of sale.
- Unmarried couples, friends or relatives who are buying property together often choose this option.
- Married couples who wish to control who inherits their share on their death for example, where there are children from a previous relationship may also choose this option.
Declaration of Trust
A Declaration of Trust is often advisable for tenants in common – if not an essential requirement. This sets out what the respective shares in the property are and how each person’s shares are to be calculated to reflect their contribution if the property is sold. It is important that this is correct as it may be difficult to change later if circumstances change.
How we can help
Our specialist Conveyancing Team can advise all joint purchasers on joint ownership issues and prepare any Declaration of Trust.
A property transaction is always a good time to make or review your Will particularly as the type of joint ownership you decide on may affect what you have set out in any previous Will. Our specialist Wills, Probate and Mental Capacity Team can help here.
For couples who don’t wish to marry or enter into a civil partnership, a Cohabitation Agreement is an uncomplicated way of setting out who owns what and what would happen if the relationship was to end. Our specialist Cohabitation Team can advise on this and how couples can protect themselves legally and financially when they buy a property together.