joint property ownership

Joint property ownership

Joint tenants v tenants in common

When you buy a property with another person or people, you can either buy as ‘joint tenants’ or ‘tenants in common’. It is important to consider both options to decide which is the most suitable for your circumstances. Clients often ask us the difference between the types of joint property ownership within conveyancing transactions. Let’s take a look:

What does joint tenants mean?

  • As joint tenants, owners will jointly hold 100% of the property.
  • In the event of the sale of the property, the sale proceeds would be distributed in equal shares.
  • If one of the owners dies, that owner’s legal share would pass automatically to the surviving person’s ownership. This is known as “right of survivorship”.
  • The property will automatically pass and does not form part of the deceased person’s will.
  • You cannot alter joint tenant ownership by making a will. If a will made by a joint tenant attempts to leave the property to someone other than the surviving owner, that section of the will would be ineffective.
  • This type of ownership is usually the most popular with married couples.

What does tenants in common mean?

  • As beneficial tenants in common, owners each own a portion of the property.
  • The shares can be equal e.g. 50%/50%, or unequal e.g. 70%/30%.
  • In the event of sale, the sale proceeds will be split as per the percentages stated.
  • If one one of the owners dies, the deceased’s share of the property would pass in accordance with their will. If there is no will in place, under the Intestacy Rules instead.
  • It is important when holding a property as beneficial tenants in common that you have a will in place which accurately represents your wishes.
  • Who does this type of ownership suit? Couples who are contributing unequal amounts to the property; friends or family members.

Do I need a declaration of trust?

  • For parties contributing unequal shares, you can protect your interest by instructing a solicitor to draw up a declaration of trust. This is to ensure that the sale proceeds are split in accordance with the level of contributions made to the equity in the property.
  • The declaration of trust is a legally binding document and therefore the terms must be honoured.
  • Further, your solicitor can register the declaration of trust as a restriction on the title of the property.
  • In the event of sale of the property, the solicitor acting would obtain a copy of the declaration of trust to ascertain how the monies are to be distributed.
  • A declaration of trust can be useful if one purchaser’s parents are gifting the deposit to a couple purchasing a property. They can ensure that, in the event of a split, the parents would receive their contribution back prior to the sale proceeds being split.
  • Owners who will be paying unequally to the mortgage find declarations of trust useful also. This can then be reflected in the event of sale.

For further advice with regards to joint property ownership, declarations of trust or wills, our specialists can help. Contact our residential conveyancing and / or wills team today on 0800 988 7756 for a FREE initial discussion.


help to buy

Help to buy ISAs - there's still time!

First Time Buyers have been able to save money towards their first home in a Help to Buy ISA since the Scheme began on 1 December 2015. The scheme provides a 25% bonus on savings; with the minimum bonus being £400 and the maximum being £3,000 depending on the balance saved in the ISA.

From 30 November 2019, you will no longer be able to open a Help to Buy ISA. Therefore it is important if you feel you will benefit from the ISA scheme to act now. Even if you are not currently thinking of purchasing a property, it may be beneficial for you to have an ISA open for future use to maximise your deposit towards a new property when you are ready to move.

For First Time Buyers who already have a Help to Buy ISA open there is no need to worry. You will still be able to save in the ISA up until 30 November 2029, and claim the bonus by 1 December 2029.

Am I eligible to open an ISA?

The criteria to open a Help to Buy ISA are that you must:

  • be aged 16 or over;
  • have a valid National Insurance number;
  • be a UK resident; and
  • have never owned a property anywhere in the world.

Which bank can I open my ISA with?

There are a wide range of banks offering the Help to Buy ISA scheme. You do not need to use your usual bank.

How does it work?

  • In order to open the ISA you will need to deposit the minimum initial payment of £1.00. However, you can input a maximum amount of £1,200 upon opening the ISA.
  • You can then input a maximum of £200 a month into the account.
  • The Government will then give a 25% bonus on savings between £1,600 to £12,000.
  • The minimum government bonus is £400. This means that you need to save £1,600 to receive the minimum bonus.
  • The maximum balance you can receive the bonus on is £12,000, meaning you could potentially receive a £3,000 bonus towards your new property.
  • When you are in a position to complete on the purchase of your new property, you will need to close the ISA at the bank. They will then provide you with a closing statement showing the balance you have saved.
  • You will need to give this to your conveyancing solicitor who will be able to apply for the bonus. The bonus will be deducted from the deposit money due for the property.
  • To qualify for the bonus, the property being purchased must have a value no higher than £250,000.00, or £450,000.00 in London.
  • If you do decide not to purchase a property you are able to withdraw the monies from the ISA back into your current account with no charge.

Our conveyancing team are experts at dealing with Help to Buy ISAs. Call us today on 0800 988 7756.