What is a Tenant in Common?
A Tenancy in Common is one of two ways to jointly own property in England and Wales and allows two or more people to own separate shares. Unlike the other option, Joint Tenancy, there is no Right of Survivorship; your share is a separate legal asset that you can leave to anyone you choose in your Will.
This structure is the preferred choice for unmarried couples, friends buying together, or investors who want an unequal equity split to reflect their individual financial contributions. By applying a Form A Restriction at the Land Registry, tenants in common ensure that their beneficial interest is protected should the relationship change or one owner pass away.
The meaning of legal ownership, beneficial interest, and tenants in common
When choosing the type of ownership, you need to understand the difference between the legal ownership and the beneficial interest.
Legal Ownership | Beneficial Interest |
The legal owners are the named proprietors (owners) at the Land Registry. You can only own the legal title equally as Joint Tenants. The legal ownership can never be tenants in common. | The beneficial interest is how someone can benefit from the property: rental income, capital gain. It can be held by joint owners in one of two ways:
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Are your Tenants in Common or Joint Tenants?
- We manually check for you.
- We supply the Land Registry copy of your Official Copy of the Register.
- We explain where to look in the future.
- Service is not offered for unregistered titles.
- Fixed Fee of £10.99 INC VAT for one title.
Why is there no right of survivorship?
As joint tenants, there is an undivided share in land, so if an owner dies, the surviving owner still owns 100% of the land and the beneficial interest. This is different for tenants in common. Whilst they hold the land as joint tenants on trust, the beneficial interest (the actual value) can be held in shares, which prevents the automatic transfer of ownership upon death.
What does the law say?
Where a [legal] estate... is beneficially limited to or held in trust for any persons as joint tenants, the same shall be held on trust for sale, in like manner as if the persons beneficially entitled were tenants in common, but not so as to sever their joint tenancy in equity.
This part of the legislation explains that the surviving owner becomes a trustee who holds the legal title of the property on trust for both themselves and the beneficiaries of the deceased’s beneficial interest.
Source: Law of Property Act 1925, Section 36 (1)
The Form A restriction, explained
The Form A Restriction is the legal mechanism used by the Land Registry to flag that a property is held as Tenants in Common. You can tell whether a property is held as tenants in common by checking the title and looking for this restriction in Section B. If it isn't there, the property is held as joint tenants.
What does the law say?
Rule 95(2)(a) of the Land Registration Rules 2003 dictates that the Registrar must enter a Form A restriction when they are satisfied that two or more persons are registered as joint proprietors of a registered estate (owners of the property) and the survivor will not be able to give a valid receipt for capital money. The wording on your Title Register will look exactly like this:
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.
Source: Land Registration Rules 2003, Rule 95(2)(a)
To help you understand the above, the Registrar refers to the legal authority granted to the position. In practice, the Registrar’s powers are exercised by the staff at HM Land Registry.
How do you reduce the risks of being tenants in common?
Whilst you benefit from no right of survivorship and having separate beneficial shares, you need to have legal documents to protect your interests now and in the future.
Draft a will
When you die as a tenant in common, your share of the property doesn't go to the other owner automatically; it goes to the beneficiaries of your estate. If you don't have a will naming these people, then it'll follow the rules of intestacy.
The intestacy rules are complicated and depend on your circumstances (marriage, children). The people who benefit under intestacy may not be the right people.
If you want to guarantee who benefits from your share in the property, then you must draft a will. This also helps administer your estate after your death.
Get a Solicitor-Drafted Will for Tenants in Common
- Drafted by a specialist wills and probate solicitor.
- Suitable for unmarried couples, friends or family buying as tenants in common.
- Wills drafted within 2 working days(1).
- Fixed Fee of £299 INC VAT for a single will, or £399 INC VAT for a mirror will.
Draft a deed of trust
This is a critical document for anyone buying as tenants in common. The reason for this is that your relationship with the joint owner isn't protected by any other law. For married couples, they are protected by Family Law, and the courts will decide what is fair to share between the divorcing spouses. For unmarried couples, friends or family, you may be left arguing over who owns what and potentially rack up huge legal fees as you dispute.
A deed of trust can contain a variety of clauses, such as:
- What is your share of the beneficial interest? Is it fixed or variable?
- What is your share of the mortgage repayments or utilities?
- What is the process to sell the property, if you don't agree?
- Are there cohabitation rules, i.e., no late parties after 11 pm?
A deed of trust is what is known in trust law as an Express Trust, and it is in essence written in stone. The deed cannot be disputed on the basis of what the owners agreed at the outset. For example, if you declared you own 40% of the property when you signed the deed, you cannot claim you own any more.
The rigidness of the deed is both good and bad. Good if you know your position, but bad if you end up paying more toward the property than the other joint owner. This is why it is so important to get legal advice on what is best for you and choose the right deed for your circumstances.
Which deed better suits the relationship?
- Deed of Assignment: This only assigns beneficial interest, so it should only be used by married couples on a buy-to-let for rental income distribution. The reason for this is that their relationship is protected by the Family Courts. The cost is £299 INC VAT
- Basic Deed of Trust: This should include a declaration of trust confirming your beneficial interest in the property how to sell the property, or transfer to each other shares in the property. It often contains a very basic fixed calculation of the beneficial split between the joint owners. The cost is £304 INC VAT
- Floating Deed of Trust: This includes the standard legal protections a deed of trust does, but it has a variable formula for calculating your beneficial interest. It should take into account how much you actually paid towards the deposit, mortgage repayments, and renovations, and the more you put in, the higher your beneficial interest should be. The cost is £399 INC VAT
Tax efficiency for Buy-to-Let investors
Married buy-to-let landlords are more and more changing from joint tenants to tenants in common with a view to sharing their rental income in a tax-efficient way.
If the property is currently held as joint tenants, in order to share rental income in separate unequal shares, you must sever the joint tenancy by applying a Form A restriction, create a deed to assign the beneficial interest and then file a HMRC Form 17. If you aren't married, you don't need to file Form 17.
Change to Tenants in Common Today
- Whether for tax planning or divorce/separation.
- Deeds drafted within 2 working days(1).
- Applications made digitally to the Land Registry within 5 working days(2).
- Fixed Fee of £559 INC VAT for a deed and a severance, or £260 INC VAT for just the severance.
Change to joint tenants when married
As an unmarried couple, it is very common to buy your home as tenants in common and then look to change to joint tenants when you marry. To achieve this, you need to remove the Form A restriction from the title at the Land Registry.
What is complicated is that there are legal hurdles to jump for the Land Registry to agree to remove the restriction. If there is a deed, it must be surrendered first. As explained above, a deed is written in stone and as such doesn't simply disappear. The deed of surrender legally revokes the deed, which then allows your solicitor to complete a Land Registry RX3 Form to remove the restriction.
Change to Joint Tenants Today
- For tenants in common who've recently married and want to change to joint tenants.
- Deed of Surrender drafted within 2 working days(1).
- Applications made digitally to the Land Registry within 5 working days(2).
- Fixed Fee of £535 INC VAT or a deed and Update Land Registry.
Frequently Asked Questions About Tenants In Common
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh has written extensively for SAM with expertise on sale and purchase conveyancing, the Help to Buy redemption process, equity transfers and deeds, leasehold reform, RICS home surveys, shared ownership, and independent legal advice for specialist mortgage products and ownership structures.
Joint Tenants vs Tenants in Common: Which is best for you?
Changing from Joint Tenants to Tenants in Common: A Guide
