We deal with all aspects of property co-ownership, from providing initial advice through to preparing agreements between two or more co-owners. Please contact us for further information.
Owning property jointly
If you buy a home jointly, whether with a husband or wife, partner or friend, it is important to understand the legal implications of co-ownership.
There are less pleasant issues to consider such as to what happens to the property if one person dies. You will also need to consider having a separate agreement in place – a Deed of Trust – setting out what happens on the sale of the property if at some time in the future there is a dispute between you, particularly if you have each contributed unequal sums.
Joint Tenancy vs Tenancy in Common
A property may either be held as “joint tenants” or as “tenants in common”. It is very important that you understand the difference between the two:
- Joint tenants – under this arrangement, each party has an equal interest in the property. On the death of one party, their share will automatically pass to the survivor, irrespective of the terms of any Will.
- Tenants in common – under this arrangement, the parties have specified interests in the property which may or may not be equal. On the death of one party, their share will not automatically pass to the survivor but will pass in accordance with the deceased’s Will, or if there is no Will, in accordance with the Rules of Intestacy.
If a property is held as joint tenants, sale proceeds will normally be divided equally, regardless of the contributions made to the purchase price or the outgoings of the property. With tenants in common, a separate legal document will be required specifying the contributions which each party has made, the circumstances in which the property should be sold and how the sale proceeds are to be divided.
What happens if there is a dispute?
In the event of a dispute, the Court will apply strict legal principles rather than making an order based on fairness. A Court will analyse the facts of each case including details of the parties’ contributions, their intentions in relation to ownership and any promises made or relied upon. This area of litigation can be protracted and taking early legal advice is vital.