When buying property with another person, one of the first and most important decisions you will need to consider is how the property will be owned. In the England and Wales, property can be owned as either joint tenants or tenants in common.
Both types of property ownership have distinct legal and practical consequences, especially when it comes to future finances, inheritance, and flexibility. Choosing the right type of ownership at the outset can help avoid future disputes or complications and ensure your wishes are followed.
Joint Tenants
Under a joint tenancy, all owners are considered to own the whole property together, rather than holding individual and defined shares. This is the case even if one party has contributed more to the purchase price. Therefore, on sale it is presumed that each owner will receive an equal share.
Another important implication of joint tenancy is the right of survivorship. This means that if one co-owner passes away, their interest in the property automatically transfers to the surviving co-owner(s). This arrangement can simplify inheritance matters, as the property passes directly to the surviving owner(s). However, it also removes the ability to leave your share of the property to someone else in your will.
For this reason, joint tenancy is common among spouses and long-term partners who want certainty, simplicity, and security in the event of one partner’s death. Joint tenancy can also be appropriate where purchasers are contributing equally to the property.
Tenants in Common
By contrast, a tenancy in common provides greater flexibility. Under a tenancy in common, each co-owner can hold a distinct and potentially unequal share of the property. For example, one owner may hold 70% while the other holds 30%.
Where purchasers are contributing unequally, it is often appropriate to record the ownership proportions in a Declaration of Trust, which is a legal deed prepared at the time of purchase.
Unlike joint tenancy, there is no right of survivorship where the property is held as tenants in common. Instead, each owner’s share will form part of their estate and passes according to their will or, if no will exists, under the rules of intestacy. This allows co-owners the ability to make provision for the share of the property they hold in their will, offering more freedom in estate planning.
Tenancy in common is often preferred by purchasers who are friends, siblings, or business partners buying property together, as well as by individuals who want their financial contributions clearly reflected in ownership shares.
Things to Consider Before Deciding
When deciding which ownership type is right for you, it is important to think carefully about your circumstances and long-term plans:
- Future planning – Do you want your share to automatically pass to the co-owner, or would you prefer control over who inherits it?
- Financial contributions – If you are contributing unequally to the purchase price, a tenancy in common allows the shares you hold the property in to reflect this.
- Relationship dynamics – Couples often choose a joint tenancy for simplicity, while unrelated buyers may prefer a tenancy in common for flexibility. However, the best choice will depend on your personal circumstances.
Conclusion
Choosing between joint tenancy and tenancy in common is more than a formality, it can have lasting implications for inheritance, future control, and financial planning.
Before you decide, it’s wise to seek legal advice from your conveyancer to ensure the ownership structure matches your individual circumstances.
If you are planning to purchase a property with another person and would like to explore your options or discuss these issues in further detail, please contact our experienced conveyancing department today on 0161 928 3201.
