Please regard the below notes as guidance only; for more detailed information and advice please do nor hesitate to contact members of our Property Services team.
Property held in joint names can be held in one of two ways. These are as follows:
Beneficial Joint Tenants
- This is where the joint owners are all equally entitled to the property .
- When one of the owners dies, that person's interest in the property passes automatically to the surviving owner( s ). If, therefore, there are two joint owners and one of them dies, the other becomes solely entitled to the property.
- A Joint Tenant cannot deal with his/her "share" of the property in a Will - it cannot pass to anyone other than the surviving owners.
- Do not be confused by the term "tenant" -this has nothing to do with "tenants" in the ordinary meaning of the word.
Beneficial Tenants in Common
- Under this arrangement the property is held by the joint owners in specific proportions, which may or may not be equal. There might for example, be two owners each owning a half interest in the property, or three owners having a 20%, 40% and 40 % share respectively.
- If one of the joint owners dies that person's interest does NOT pass automatically to the surviving joint owners, but would form part of his/her estate and will pass according to that person's Will or under the rules of intestacy.
- A joint owner could, therefore, make a Will leaving his/her share to the other owner(s) or leaving it to someone else altogether.
- When the property is held in this way, it is essential to have a declaration of Trust either in the deeds or separately which states the proportions owned by each of the joint owners.
Other Factors to Consider
It is necessary when purchasing a property in joint names to decide whether the property should be held as Joint Tenants or as Tenants in Common. This decision need not be permanent as it is possible to change from one form of ownership to the other.
Please note that severing a joint tenancy (ie: converting to tenants in common) can be done without the consent of the joint owner(s). One person can instigate it and the other(s) do not have to agree for it to be effective.
If the joint owners are not entitled to equal proportions of the value of the property then they should not hold the property as Joint Tenants, unless they wish to become entitled to equal proportions.
If the joint owners do not wish their interest to pass automatically on their death to the other joint owner(s) they should not hold as Joint Tenants, but as Tenants in Common. There may be personal and/or tax reasons for this.
If the joint owners wish to hold the property as Tenants in Common (usually because they own unequal interests in the property or for tax reasons) but they do wish the surviving owner(s) to inherit their interest in the property it is essential that the property is covered by the terms of their Wills.
If the joint owners are married it is important to note that the court can, on divorce, make a Property Adjustment Order and in those circumstances legal ownership of the property is not the deciding factor. The Court also has the power on the application of a parent to transfer the property or settle the property for the benefit of the child of that parent. This applies whether or not the parents are married. In such cases, as on divorce, legal ownership of' the property is not necessarily the deciding factor .
