COVID-19: Read the latest on how we can support your conveyancing journey. Find out more

cloud cloud cloud cloud cloud cloud cloud cloud

Joint property ownership – a problem area for couples living together

The complexities which can arise when two or more people jointly own a house or flat were highlighted in a recent court case.

This case also made clear that English law does not recognise so-called common law marriages.

As a result when a woman who had lived with a man for many years but was not married to him nearly lost her home following his death.

Joy Williams owned a house jointly with Norman Martin and had lived with him for 18 years. But he had never divorced his wife, who was still alive. When he died his widow was legally entitled to his share of the property – all because of a few words in the title deeds.

So when two people are buying a property together in their joint names, whether married or not, then they must ensure that the correct method of joint legal ownership is correctly set out in the transfer deed. This should be discussed with the solicitor doing the conveyancing who will be able to offer advice.

Two ways of owning property jointly

In England and Wales there are two methods by which a property can be owned by two or more people. For convenience these can be called ‘undivided shares’ and ‘divided shares’ as the full legal names are somewhat misleading.

When property is owned with divided shares each owner will have a specific stake in the property – perhaps two owners will each have a half-share, but one could have 99% and the other just 1%, or anything in between. These shares may reflect the amount of money that each owner has contributed to the purchase price but can be for other reasons entirely.

Of course the owners do not own specific parts of the property itself – one owner cannot say that they own the ground floor and the other owns the first floor! They are both entitled to occupy the whole property if they want to.

But when the property is sold the proceeds of sale will be split between them according to their respective shares.

In contrast the joint owners of property held in undivided shares each hold the whole of the property jointly and are jointly entitled to all the proceeds if the property is sold. No co-owner can claim a specific share of the property or the proceeds of sale.

[The two methods of joint property ownership are technically called ‘joint tenancy’ (undivided shares) and ‘tenancy in common’ (divided shares). These names are somewhat misleading as there is no question of any tenancy being involved, but these are the terms that will be used in legal documents.]

There is one very important difference between the two methods of joint ownership. When property is owned in undivided shares the legal ownership will automatically pass to the survivor when one owner dies, irrespective of anything in their will.

But if property is owned in divided shares each owner can leave their share in their will and does not have to leave it to the other co-owner.

This was what happened to Ms Williams. Although she had owned a house jointly with Mr Martin, for some reason the title stated that they owned it in divided shares. Mr Martin had not up-dated his will and had left his property (which therefore included his share in the house) to his wife.

No such thing as Common Law Marriage in England and Wales

English law does not recognise so-called ‘common law marriages’ so although Ms Williams had lived with Mr Martin as his wife for 18 years she could not be regarded as his wife, especially since Mrs Martin was still married to Mr Martin at the time of his death.

So Ms Williams faced the threat of having to sell her home and give half the money to Mrs Martin.

Had the property been owned with undivided shares then Mr Martin’s interest would have passed to Ms Williams automatically when he died, notwithstanding what was in his will.

As Ms Williams faced losing her home she went to the county court to claim Mr Martin’s half share of the house “so that she has some security for the future”. The judge agreed she had established that she was entitled to make a claim and in a ruling lasting almost four hours concluded that she should “retain an absolute interest” in the property.

So Ms Williams has won but only after a lengthy court case. Mrs Martin now faces a six-figure legal bill, but has indicated that she may appeal. So there is a possibility that the county court judge’s ruling may be reversed – and in the meantime both Ms Williams and Mrs Martin will be faced with uncertainty not to mention legal bills.

More and more people are now living together without being married or in a civil partnership. And this is giving rise to many legal problems when property ownership is involved.

Whenever a property is being purchased by joint buyers, whether or not married or in a civil partnership, legal advice must be obtained on the appropriate method of joint ownership.

It is also recommended that an agreement or trust deed is drawn up which sets out in detail the relevant interests of the partners and who gets what if the property is sold or one partner dies. (In some cases it will be advisable for one or both partners to obtain advice from another solicitor to avoid any conflict of interest.)

Back To Top