Joint Ownership of Property - How to Co-Own a property

28/10/2019
The joint ownership of property is common when buying a property as it makes the purchase more affordable. Unmarried couples buying their first home, parents helping purchase a property for their child or even family passing down property from generation to generation. There are, however, important factors to consider with co-ownership and what the legal implications of these are especially if the relationship between the joint owners breaks down and one party wants to sell and the other doesn't. The co-owners could be left with a lengthy legal battle trying to force a sale.

In this article we examine how you can jointly own property in England and Wales, what the legal implications are and how co-owners can protect themselves and their investment in the property from unforeseen changes in their relationship such as if a co-owner dies, wants to sell or stops paying the mortgage.

Joint Ownership of the Legal and Beneficial Interest

The legal owners of the property are registered at the Land Registry and you can find out who the current legal owners are by searching here - Search for property information from HM Land Registry. The beneficial ownership is how the beneficial interest is shared and is either shared as joint tenants 100% shared equally, on in separate shares as tenants in common. Read more about Beneficial Ownership vs Legal Ownership. You can only have 4 joint owners registered at the Land Registry, however you can have any number of beneficial owners.

Joint Tenants v Tenants In Common

When buying a property, or adding a new owner onto the legal title, the joint owners must choose whether to own the property as joint tenants or tenants in common.

Joint Tenants

(also known as joint tenancy or beneficial joint tenants)

Tenants in Common

  • Each joint tenant has an equal and identical interest in the entire property (the use to live and use the property) or the net property income (rent or proceeds of sale);
  • If a joint tenant dies their share of the property passes to the remaining joint tenants;
  • A joint tenant cannot leave their share in the property to someone in their will and nor can it be shared intestacy as it does not form part of the deceased's estate; and
  • One joint tenant on their own cannot sell the property without the consent of the other joint tenants.
  • Each tenant in common on purchase or transfer expressly states their specific share in the property; this could be in equal shares or whatever other share are agreed however the tenants in common beneficial share must add up to 100%; and
  • If a tenant in common dies their share passes to the beneficiaries of their estate; either through their will or via the laws of intestate dies their share of the property passes to the remaining joint tenants; and
  • a deed of trust can be drafted to set out how to sell, how to share property income and what the intentions are for the property.

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How to find out if you are joint tenants or tenants in common?

When you buy a property as tenants in common a Form A restriction is registered over the legal title. To check if you own the property as joint tenants you can download the Land Registry title and look for the restriction which states:

Form A (Restriction on dispositions by sole proprietor)
No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.

If the above restriction isn't noted on the legal title the the property is held as beneficial joint tenants.

Can a joint owner of a property force a sale?

How you can sell depends on how you hold the property as joint tenants or tenants in common.

  • Joint Tenants both joint owners need to agree to sell the property, or else they need severance of joint tenancy and then force a sale as tenants in common.
  • Tenants in Common forcing a sale as tenants in common requires the joint owners to prove their intentions. An application for an order of sale will review the original intentions of the parties and then make an order. Find out about What an order of Sale is and Who can Get One?. It is easier to force a sale if the joint owners executed an express trust (deed of trust) that state what their intentions were for the property and what should happen if any of the joint owners wanted to sell the property.

What can joint owners do to protect themselves?

A joint tenancy suits a marital relationship where both parties view their share of the property as equal and don't want to have to look to a will to see who is to benefit from their family home. Whether this is suitable protection for joint owners is questionable considering the high divorce rate in England.

When buying as tenants in common, the relationship between the owners is normally that of investors, friends, family or unmarried couples. With these types of relationship it is advisable to seek further legal protection.

Deed of Trust

(also known as Express Trust, Bare Trust or Declaration of Trust)

Will

As highlighted above, when buying as tenants in common when one of the owners dies, their share in the property transfers to their estate. To protect the surviving owners each tenant in common should draft a will to state how they wish their estate to be handled in the event of their death.
As highlighted above, when buying as tenants in common when one of the owners dies, their share in the property transfers to their estate. To protect the surviving owners each tenant in common should draft a will to state how they wish their estate to be handled in the event of their death.

 
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