What is the difference between Joint Tenants and Tenants in Common?

Joint Tenants and Tenants In Common | Robertsons Solciitors

As you go through the process of purchasing a property, your Conveyancing Solicitor will ask whether you and your Partner would like to hold the property as Joint Tenants or Tenants in Common.  There is a distinct difference between the two and both have different legal effects.

What does Joint Tenants mean? 

If you and your partner decide to own a property as Joint Tenants then unless there is any other deed suggesting otherwise, you will share the property in equal shares.  This means that if the property is sold, there is the presumption that the sale proceeds will be split equally between you.

In addition, there is a legal effect if either of you dies.  If you died, your share of the property will pass to your Partner irrespective of what you set out in a Will, Therefore, if you have no Will, or even if your Will says that your share of the property should go to someone else, the law states that your Partner would automatically be entitled to your share of the property.

How are Tenants in Common different to Joint Tenants?

If you are unmarried and one party is providing a large proportion of the deposit, you may wish for this to be reflected in a Deed or as part of the Transfer.  Furthermore, if one party is going to contribute more to the property (such as improvements or to the mortgage payments) you should strongly consider this being reflected in a Declaration of Trust. If this is not set out in either of those documents, then it is presumed that the property is held in equal shares.

By entering into a Declaration of Trust, this will be recognised as Tenants in Common and will be reflected on the Property Register.  If the property is sold, the sale proceeds will be divided as set out in the Declaration of Trust (rather than equal shares).

Furthermore, if you and your Partner hold the property as Tenants in Common, you will each have a defined share.  If you die, your share in the property will pass under the terms of your Will.  If you do not have a Will then they will follow the rules of Intestacy. 

You will note that we mentioned Tenants in Common for unmarried partners.  You can provide Tenants in Common for married partners or those in civil partnerships, however, the rules are slightly different if the property is being sold as part of divorce or dissolution proceedings and separate advice would be required.

Do I need a Will if we are Tenants in Common?

If you do not have a Will and you are unmarried, then your share of the property does not automatically pass to your Partner.  This may cause difficulty with your Partner’s rights to reside in the property if you pass away.  It is therefore important that you consider making a Will when you purchase a property, especially if it is held as Tenants in Common.

Obtaining advice when purchasing a property

If  one party is contributing more to the deposit or is going to contribute more to the mortgage or improvements on the property then you must seek specialist advice.  The advice you receive may be different if you are an unmarried couple to that of a married couple, but ultimately, you may wish to enter into a Declaration of Trust to protect shares or investment in the property if the relationship breaks down at a later date.

If you do not obtain the right legal advice and sign the necessary documentation at the outset, it could mean that you lose your investment or deposit that you put into that property.

Talk to our legal team via law@robsols.co.uk for specialist conveyancing and Wills advice.

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