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Hammersmith Property Solicitor Helena Camacho considers Co-ownership of Property:
Co-ownership of Property: Joint Tenancy or Tenancy in Common ?
When two or more people have interests in a property they are said to be in co-owners of the property. A common example of this is when people buy a house together. In co-ownership, a trust of land occurs and the legal estate is held by the persons that purchased the property as trustees for themselves. While the legal interest in the property can only be held under joint tenancy, the beneficial interest in that property can be held either as a joint tenancy or as a tenancy in common.
When two people own a property as co-owners it is assumed that the property is held in joint tenancy unless otherwise specified. The assumption does not apply however if words of severance such as ‘in equal shares’, ‘equally’, ‘half and half’ are specifically mentioned or there exists a presumption of tenancy in common. Tenancy in common is presumed for instance when the money for the purchase of property is provided in unequal shares or when property is purchased by a business partnership.
One of the most important aspects of joint tenancy is that joint tenants are entitled to an equal share to the property without there being any individual shares. When the property is sold, the proceeds are distributed equally between them. Thus, if there were two partners, each of them will therefor get 50 per cent of the money.
Another crucial aspect of joint tenancy is the right of survivorship which means that if a joint tenant of a property dies, their interest in the property is automatically transferred to the remaining joint tenant/s. If a property is held in joint tenancy by three people and one person dies, their share in the property is automatically transferred to the other two survivors. On death of the other joint tenant, the lone survivor becomes the absolute owner and has legal and equitable interest in the property.
Tenants in common may or may not have equal shares in the property. When people own a property as tenants in common, it is advisable that they spell out their shares in the estate by expressly agreeing and recording them in a deed of trust or a certified copy transfer. The deed should be signed by all parties concerned and registered at the Land Registry.
In contrast with joint tenants, when people hold a property as tenants in common the right of survivorship does not apply. On the death of one owner, their share is distributed as per their will or intestacy. The legal interest that is under this type of tenancy is held by the survivor partner/s on trust for themselves and the estate of the deceased partner. Such a trust over land remains until a second trustee is appointed on sale to ensure that the trust is overreached.
Private individuals may sometimes opt to be tenants in common and it is usually preferred by partners in a business to ensure that their share is transferred according to their will and does not automatically transfer to the surviving partners.
Hammersmith conveyancing solicitor Helena Camacho notes that when buying property with others thought should be given to whether joint tenancy or tenancy in common are best suited to the circumstances.
If you have any queries about Co-ownership please contact Helena Camacho on email@example.com