Joint ownership of a property is extremely common so it is important to fully understand the ways in which parties can 'co-own' a property and their implications.
The two ways of owning a property jointly are as 'joint tenants' and 'tenants in common'. Traditionally, married couples would be advised to buy as joint tenants due to the rule of survivorship (explained further on) but this is beginning to change due to such things as inheritance tax implications and providing for children from a former marriage. It is now becoming increasingly common for co owners to own as 'tenants in common' since friends, unmarried couples, siblings etc. are buying property jointly.
Owning as 'joint tenants' is possible where there are two or more parties. If one owner dies then the surviving owner(s) take the deceased owner's share of the property under the 'survivorship rule. ' Owners in a joint tenancy share equal ownership of the property and are all equally entitled to keep or dispose of the property. This type of ownership is most suited to married couples but detailed instructions need to be taken in relation to each co owner’s circumstances and wishes.
Severing a Joint Tenancy
If you want to sever the joint tenancy and turn it into ownership as 'tenants in common' then a 'Notice of Severance' needs to be served by one party on the other and then an application using form SEV needs to be completed and submitted to Land Registry. The form can be downloaded free of charge from the Land Registry website.
As tenants in common the co-owners own identifiable shares in the property. There can be any number of joint owners and the percentage of their share should be recorded in a 'Declaration of Trust' document. The important distinction between owning as tenants in common and owning as joint tenants is that if one co owner dies in a tenancy in common their share will pass under the terms of their will, if they have one and if they don't have a will, their share will pass under the 'Rules of Intestacy. ' The deceased co-owner’s share does not therefore pass to the other co- owner(s). Land Registry will include a restriction in the Proprietorship Register stating that there cannot be any disposition of the property by a sole owner unless it with a court order.
Changing from Tenants in Common to Joint Tenants
If you wish to change a tenancy in common to a joint tenancy then you will need to apply to Land Registry to have the restriction referred to above, removed. You should instruct a conveyancer on this who will be able to advise you on the correct procedures and will draft a Declaration of Trust document setting out the share held by each party once the form of ownership is changed to ‘Tenants in Common. ’
Fridaysmove are experienced in dealing with all types of residential conveyancing matters and if you are considering buying or selling jointly held property we would be pleased to assist. You can contact us on 0203 441 0844 for further information or obtain an instant online Conveyancing Quote.