When purchasing a property with another person(s) in England and Wales, one of the decisions you will have to make is whether you will hold the property as joint tenants or tenants in common; so what does this mean?

Joint Tenants

This is the default choice to register a property. Holding the property as joint tenants means you own all of the equity in the property jointly: there are no ‘shares’. If Mark and Jane purchase a property and opt to hold the property as joint tenants, they therefore, both own 100% of the property. Upon the death of either proprietor, the property automatically passes to the surviving proprietor.

Tenants in Common

This is where you own the property but in defined shares. Your ‘share’ or equitable interest in the property can be equal or unequal, as agreed between the property owners. However, the key difference is that your share does not automatically pass onto the other proprietor(s) upon death. Instead, if one proprietor dies, their share will pass in accordance with their Will or in accordance with the intestacy rules if they die without having a Will. 

Therefore if Mark and Jane hold the property as tenants in common in equal shares (i.e. 50% each), upon Jane’s death, her share will pass in accordance with her Will or intestacy. This allows Jane to make decisions on who to pass her share of the legal interest of the property i.e. to her children/grandchildren etc. 

If Mark and Jane were purchasing the house, but Mark was paying a higher deposit, it is possible to hold the property as tenants in common but in unequal shares. If Mark and Jane are purchasing a house for £300,000, but Mark is contributing £180,000 and Jane is contributing £120,000, they may wish to hold the property in a share of Mark 60% and Jane 40% to reflect each contribution to the purchase of the property.

If you choose to hold the property in unequal shares, it is important that your decision is recorded in a legal document such as a declaration of trust. This document will set out how each party intends to hold the property and in which shares. 

Conclusion: What are my next steps?

It is essential for your decision that you discuss and consider your own personal circumstances and obtain legal advice on your choices of how you will hold the title to the property, plus the best way to protect each of your shares in the property. 

Please do not hesitate to contact our friendly and helpful Residential Conveyancing team at Prettys, who would be more than happy to advise you further.

Joseph Jordan – jjoran@prettys.co.uk 
Heidi Vanlangenaeker – hvanlangenaeker@prettys.co.uk