When purchasing a property with somebody, there is usually a lot of excitement in the air. In this excitement, it can often be easy to get swept up and, as such, not have a proper thought about the legal protection that you need. Even more than that, you need to think about what you would want to do with the property if the relationship were to end or one of you were to pass away. Yes, these are not nice conversations to have, but they are necessary when it comes to making sure you are happy with the final decision you come to. In this blog we will discuss Tenants in Common vs Joint Tenants in the United Kingdom.
What Options Are Available to You?
When you are buying a property together, if you are a married couple, then you have a choice to make, which is do you want to register as joint tenants or as tenants in common. In short, when you are joint tenants, then, the law states that both partners jointly own the property as a whole. On the other hand, when you are a tenant in common, it means that you both have your own specific share of the property. You should consider both of these options in great detail and then decide which one you believe is right for you.
Joint Tenants
When you are operating under a joint tenancy, both you and your partner would collectively own the whole property, and you wouldn’t have a quantified share. You tend to find that the majority of couples choose this option when they are buying a property together because it is a lot more instinctive to share the whole thing. Relationships tend to have a ‘what’s mine is yours, what’s yours is mine’ attitude attached to them.
Being joint tenants is a good option if you have a good and long-lasting relationship. Even when a will is left, if you and your partner are together in that property until one of you passes away, then the ownership will simply pass to the other partner under the right of survivorship. This means the transfer of property in this instance is simple and straightforward. After the other partner dies, this is when the property would pass down to whoever has been specified as a beneficiary in the respective wills.
Joint tenancy is also the much simpler option out of the two, but it does require you to sit and work out what each of you has contributed to the purchase price of the property. If the relationship ends before one of the two dies, then there are different options available to joint tenants when it comes to the property. They might both decide they would like to move out of the property and divide the proceeds 50/50. Another option is that one of them decides to stay in the property and buy out the 50% share of the other who is leaving. If both decide that they would like to stay there, then this becomes a matter for the court to decide, which can be costly thanks to legal fees.
Though joint tenancy is simpler, it can create more issues. For instance, in the result of a split, one partner might decide that they do not agree with a 50/50 split and think they deserve more. This could be because they have paid more for the property or have contributed a greater deal to it. Again, this will be a matter for the courts to decide.
Tenants in Common
When a couple decides to enter into a sale as tenants in common, they are able to bring a lot more clarity to the situation. For instance, it may be the case that one party is contributing a lot more to the purchase price, and they both believe this should be recognised. A lawyer will usually be needed in order to help couples become tenants in common. The amount created at the outset can be altered to accurately reflect future contributions that they make towards the property. This would occur if one person gets a new job and starts making more money so therefore begins to pay more towards the property.
Couples also have the option to go into more detail beyond just the percentages that they have contributed. This is done using a trust deed, and by using experienced will writers it can be laid out in their will. When people enter as tenants in common, it also means their share of the property can be passed down to beneficiaries at their time of death as opposed to it all going to their partner under the right of survivorship. You tend to find that this is quite a common option when couples are in their second marriage and are unlikely to have any more children but would like to leave their property to the children from previous relationships.
One of the major benefits that comes with being a tenant in common is that there is a lot more clarity brought to the relationship and the ownership of the property is a lot more certain. Not to mention, there is more flexibility involved, and it is easier to leave their share to someone upon their death.
Tenants in Common vs Joint Tenants: Which Should You Go For?
When you are in the process of purchasing a property with your partner, you will be faced with the decision as to whether you would like to be tenants in common or joint tenants. Both come with their own advantages and disadvantages and in order to decide, you and your partner will need to have awkward conversations about the position you would like to be in if you were to separate or one of you were to pass away.
There is help on hand if you need more information about the situation with your property if one of you were to pass. At Norfolk Will Writing, we have a team of experts who can help with your will and answer questions you may have. Please do not hesitate to get in touch if you would like any help throughout this process.
