Author : Mary-Anne Bowring
It is important when considering the purchase of property as a group of two or more rather than as an individual to take time to review how you want to register your ownership. The choices are to be joint tenants or tenants in common, and the difference between the two is considerable.
If you choose to be joint tenants then each person owns the whole of the property with their share passing automatically on their death to the surviving tenant(s). There are several conditions that joint tenancies must adhere to if they are to be valid. These include:
- Each tenant must hold an equal share in the whole of the property (important if you want to sell). Also the tenants must hold the title to the property in only one document (i.e. the Title Deeds).
- It is also necessary for the start and end dates of all the tenants to be the same, and for them to have equal rights to possession of the property, (so that no one can be shut out).
- There can be no more than four tenants at any one time. Please note that although the shares in joint tenancy are equal, the contribution to the purchase price doesn't have to be.
Tenants in common is simple by comparison, with only the equal rights to the possession of the property required. It is not necessary under tenants in common for each tenant to have an equal share in the property, so you may choose to reflect the amount each tenant paid to acquire the property with a 60-40 or 70-30 split if you so choose, although this is not mandatory. The most important difference from the joint tenancy is that whatever the share in a property held by tenants in common, it will be disposed of after the tenant's death as per the instructions in their will rather than reverting back to the other tenants. This will be an important distinction when considering to whom you wish to leave your estate.
Mary-Anne Bowring FIRPM FRICS FARLA FCABE Founder/Head of Asset Management
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