Tenants In Common Definition

19/10/2017
Tenants in Common is the legal definition for the joint ownership of a property where 2 to 4 parties own separate beneficial shares in a property. When you jointly own a property you can own the property as:


As a rule of thumb, if your intention is to invest varying amounts of money into the property and you want to reflect this is a separate ownership share, or you aren't married, then you are advised to buy as tenants in common. Click on the above link to find out more about buying as joint tenants.

On completion of the conveyancing, your solicitor will register your separate interests at the Land Registry so that, upon sale, this can be used when distributing any proceeds.

The risk for tenants in common is the potential for their share in the property to be affected during the ownership of the property. Parties may be paying different shares in the mortgage repayments or funding development to the property. This is why tenants in common should draft a legal agreement before purchasing to clearly state their intentions with each other and to cover these eventualities. This type of legal agreement is called a Deed of Trust.

Read on to find out:

  • What legal rights do tenants in common have?
  • What happens if tenants in common die?
  • What happens if tenants in common die without a will?
  • What happens if tenants in common aren't married?
  • Tenants in Common Vs Joint Tenants

Are you buying as tenants in common and need a Deed of Trust?

Protecting your interests when buying as tenants in common is important which is why we offer a variety of deed of trusts to suit the relationship you have with your joint owner:


Get a Deed of Trust *
* Fixed Fee – Trusts to Suit Your Circumstances – Fast Turnaround (deeds issued within 1 to 3 days after instruction)
No time for forms and want to call? Call us on 0333 344 3234 (local call charges apply Mon-Fri 8am to 6pm)

Fixed Fee, No Sale No Fee and Unbeatable Value Solicitors.

 

What rights do tenants in common have regarding the property?

As tenants in common, each person has their own share in a property which is distinct, legally, from the other tenants in common. Tenants in common may hold different sized beneficial shares in a property - there is no requirement for the shares to be of equal size.

What happens when the property is sold?

Tenants in common can mutually agree to sell their property, in which case all benefits and costs are divided according to the size of each tenant in common's individual share of the property. Tenants in common can freely and independently each sell their own individual share in a property or mortgage it or leave it in a will to any person they choose. Any sharer could, for example, move out of a house, having sold their share and rights to the property to any third party.

Important: As relationships can break down between tenants in common it is important to ensure you have pre-agreed what happens when either party wants to sell their share in the property if the relationship falls apart. This is a clause that should form part of a written express trust ('deed of trust').

What happens if one of the tenants in common dies?

If one of joint owners dies, their beneficial interest in the property passes onto their estate which will be distributed in accordance with their will, or in line with intestate laws if they don't have a will.

This is one of the largest differences between owning the property as tenants in common and joint tenants because as joint tenants, the deceased's beneficial interest automatically passes to the surviving joint owner.

Can I pass on my ownership of the property to anyone when I die?

Yes. Your beneficial share of the property will pass to your estate so it is important to draft a will when you buy a property with someone else so that it is clearly stated who will benefit from your share of the property when you die.

Tenants in common must draw up a legal agreement to protect each tenants' individual interests when they live in a property.

They may, for example, want to control exactly who can move in if one tenant in common decides to sell their share or if a tenant passes away.

No help for tenants in common in 'common law marriage'

The legal changes do not give any assistance to cohabiting people who are neither married or civil partners. Cohabiting couples were the fastest growing family type in the UK between 1996 and 2016; their numbers more than doubled from 1.5 million to 3.3 million The number of cohabiting couples in the UK has almost doubled between 1996 - 2012 from 1.5 million to 2.9 million, according to the Office for National Statistics (click here for more Government statistical information about Families and Households)
Tenants In Common Definition
These figures may be a considerable underestimate. Despite legal and cultural improvements in the position of lesbians, gays, bisexuals and transgenders, undoubtedly many members of this group who cohabit do not widely report it. These people, when they buy properties together, are invariably buying as tenants-in-common. And it is when one of the partners dies intestate that devastating issues can arise, which may, for example lead to a surviving partner having to leave a previously shared property with no financial recompense.

The Government is not likely to change its legislative position soon but there are other legal devices available, which are generally referred to as deed of trusts. These can do much to protect the interests of tenants in common who are not married to or in civil partnerships.

Joint Tenancy vs Tenants in Common

Any prospective sharers should also be aware of the distinction between a joint ownership agreement drawn up as a joint tenancy as opposed to tenants in common.

A joint tenancy, which is the case with a married couple, means that if one partner dies then all of the interests in the property pass to the surviving partner. A Deed of Trust which states that the arrangement will be as 'tenants in common' means that if any of the partners die, then their share will not pass to any survivor but will pass onto whoever the deceased person has previously nominated.

If a joint ownership agreement is drawn up as 'tenants in common' it would normally follow that each partner has drawn up a will stating how their share is to be disposed of in the event of a tenants-in-common death. The device is particularly useful when a partners in a property hold unequal shares as it will set out exactly what percentage each partner owns.

Are you buying as tenants in common and need a Deed of Trust?

Protecting your interests when buying as tenants in common is important which is why we offer a variety of deed of trusts to suit the relationship you have with your joint owner:


* Fixed Fee – Trusts to Suit Your Circumstances – Fast Turnaround (deeds issued within 1 to 3 days after instruction)
No time for forms and want to call? Call us on 0333 344 3234 (local call charges apply Mon-Fri 8am to 6pm)



Related News Articles

 
Basic Deed of Trust
14/07/2018
Joint Tenancy Definition
16/08/2017
Silver Shared Ownership Protection
15/12/2017
What is Shared Ownership Protection?
20/12/2017
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