Joint Tenancy & Tenancy in Common– An explanation

When buying a property with somebody else, the terms of ownership of that property need to be recorded – Joint Tenancy or Tenancy in Common.  The majority of married couples elect to hold a property as beneficial joint tenants to recognise the fact that buying the property is a joint commitment.

Buying a property as joint tenants

You own equal rights to the whole property (i.e. 50:50).

In the event that one joint tenants dies their interest in the property passes automatically to the survivor.  Such an interest cannot pass under your Will.

If joint tenants should fall out or (being a couple) separate, then careful consideration should be given as to whether any existing joint tenancy should be severed.  For example, if a marriage breaks down either or both parties may wish to sever the joint tenancy so that they can leave their shares under the terms of their Wills (often to the children or relatives on their own sides of the family).

Severance of a joint tenancy does not affect either party’s entitlement, but it alters the basis upon which the property is held.  After severance, the property will be held by the parties as tenants in common – see below.

If a joint tenancy is severed, then the shares under the tenancy in common will be 50:50 but if a tenancy in common is created when the property is bought then shares might be unequal.

Will severance of the joint tenancy affect financial entitlements on divorce or separation?

The severance of a joint tenancy will make no difference to the existing share so the short answer to that is no.

Buying a property as tenants  in common

The parties can own different shares.

The property does not automatically pass to the surviving owner if one party dies.

Either party can pass their share under their Will.  Many people think that this is a complicated process but in fact it is fairly straight forward. It can be done with or without the agreement of the other joint owner.  If there is agreement, then a short document needs to be prepared.

If one party decides, unilaterally, to sever the joint tenancy then he/she needs to serve notice, on the other party, to that effect.

It is customary for the receiving party to be asked to sign a duplicate to confirm that they have received it, but this is actually not essential, as long as the fact of service can be proven.

After the joint tenancy has been severed, the existence of the Tenancy in Common should be registered with the Land Registry so as to prevent the property being disposed of by the survivor after the first death.

Changing your will

When severing a joint tenancy, it is very often necessary to make a Will.  For example, if you are married and have made a Will leaving everything to you spouse and you then sever the joint tenancy you will then need to make another Will if you wish to leave your share in the property to children or other family members.

Learn more

Please contact us if you wish to discuss these issues further or learn about our conveyancing services here.