When it comes to property ownership, understanding how you can co-own a property is important. Joint tenancy is the most common way to co-own a property in the UK. This applies whether you’re buying a home with a partner, family member, or a friend, understanding what joint tenancy means can help you make informed decisions about your property investment. Let’s take a closer look.
What is joint tenancy?
In short, a joint tenancy is a legal arrangement where two or more individuals hold an equal share of a property. Each co-owner then has an equal right to the entire property. Unlike other forms of co-ownership, a joint tenancy is distinguished by its right of survivorship.
What is the Right of Survivorship?
Should one of the joint tenants pass away, their share of the property automatically transfers to the surviving co-owners. This bypasses the need for probate, making it a much more straightforward option if you want to ensure the property is retained.
As an example, if you won a property with your partner, you would become the sole owner of the property in the unfortunate circumstance that they should die. While that is not something we like to think about it’s an important consideration and can give peace of mind and financial security, especially for couples and families.
How does joint tenancy differ from tenancy in common?
It’s important not to confuse joint tenancy with tenancy in common which is another common form of co-ownership. While both enable multiple people to own a property together, there are key differences:
- Equal shares: In joint tenancy, all owners must have equal shares in the property. In a tenancy in common, owners can hold unequal shares, depending on their contribution to the purchase price.
- Right of survivorship: Where a joint tenancy includes the right of survivorship, tenancy in common does not. When tenancy in common, an owner’s share can be passed on to beneficiaries through a will, rather than transferring automatically to the other co-owners.
- Severance: A joint tenancy can be broken when one of the owners sells or transfers their share, which then converts the ownership into a tenancy in common. When a tenancy in common, each owner has the right to sell or transfer their share autonomously.
Advantages of a Joint Tenancy
Simplified inheritance
As a property automatically transfers to the surviving owner(s), without the need for probate, the right of survivorship makes the inheritance process simpler and quicker.
Equal rights
The equal ownership and rights to the property in a joint tenancy make it a fair arrangement for those who share ownership equally.
Security
Joint tenancy provides security for couples or close relatives, knowing that property will remain with the surviving owner(s).
Possible Drawbacks of Joint Tenancy
Inflexible
Because all owners are equal if your circumstances change it can be more difficult to adjust your share of ownership compared to tenancy in common.
Involuntary inheritance
Right to survivorship means, if you pass away your share automatically transfers to your co-owner(s). This is regardless of anyone else who you might want to inherit your assets. Therefore in this instance, the right of survivorship can sometimes work against your wishes.
Financial risk
Equal responsibility also means that if one owner incurs debts or financial liabilities, it can effectively impact your property.
Is joint tenancy right for me?
This largely comes down to your specific circumstances and future requirements. It’s usually the most favourable option for couples who want to ensure their partner is automatically protected in the event of death, or for those who want a straightforward, equal ownership structure.
If you want more ownership flexibility or have inheritance considerations, you might want to explore tenancy in common.
Getting the right legal advice on this, before committing, is always advisable. Speaking to a solicitor will be beneficial as they will explain the full implications of joint tenancy and whether it aligns with your long-term objectives.
Selling a joint ownership property
Using a Propertymark-protected agent can provide you with peace of mind and professional support throughout the sale of your property.
Accredited agents adhere to strict codes of conduct, ensuring transparency, accountability, and high standards of service.
They are well-versed in handling the unique challenges that can arise when selling a jointly owned property. Including coordinating with all owners, managing the distribution of sale proceeds, and helping you navigate any legal complexities.
To find your local agent look for the Propertymark logo that they display. Or use the link below and we will help you find local qualified agents.
Last Updated: August 27th, 2024
