Buying a Home? Joint Tenants vs Tenants in Common

When two or more people make the decision to purchase a property together, they may choose to buy the home as ‘joint tenants’ or ‘tenants in common’. But what are the main differences between these two property purchase pathways?

Joint Tenants                                     

Purchasing a home with one or more other people as joint tenants mean that each of you owns the property in its entirety. Or to put it another way, no specific or identifiable share is owned by any of the buyers – you all have an equal stake in the property and take ownership of the whole thing.

When the property is sold at a later date, each joint tenant is entitled to an equal share of the proceeds. Irrespective of how much they contributed by way of mortgage repayments or lump sums, every joint tenant is legally entitled to the same share of the funds raised.

In addition, joint tenants also acknowledge and accept that if one of the tenants dies, the surviving tenants will automatically be allocated their share of the property. This is known as ‘Right of Survivorship’ and supersedes the wishes and instructions outlined in the deceased person’s will.

Hence, you cannot enter into a joint tenancy and leave your home to anyone else in your final will and testament.

Ending a Joint Tenancy

If all parties involved agree to do so, a joint tenancy can be changed to tenants in common. Referred to as a ‘Notice of Severance’, an application must be made to make the necessary changes at the Land Registry, usually calling for qualified legal representation.

Tenants in Common

The biggest difference with tenants in common being that each buyer entering into the agreement is allocated a specific and identifiable share of the property.  In most instances, this will be two buyers who are allocated an even 50/50 share, but there are no specific restrictions or limitations with regard to allocation of unequal shares.

For example, three people could purchase a property together – two of which are allocated a share of 40% each, while the third party takes a share of 20% of the property’s value.

Another key difference with tenants in common is that all buyers have the option of leaving their individual shares to the beneficiaries of their choice in their will. In the event that one of the buyers dies without leaving a will, their share of the property is automatically passed to their closest living relative – not the other tenants.

A tenancy in common agreement is therefore considered more flexible than joint tenancy, as it provides the buyers involved with freedom of choice regarding ownership stake and future asset allocation.

Evaluating the Available Options

When considering a property purchase as part of a couple or a group of individuals, it is important to seek expert legal support at the earliest possible stage. Solicitors fees for buying a house vary in accordance with various factors, including the complexity of the transaction. It is therefore crucial to find a conveyancer you can trust, compare conveyancing fees and evaluate all available options, before making your final decision.

For more information on the potential benefits of joint property ownership or to discuss any aspect of the home purchase process in more detail, contact a member of the team at Aristone Solicitors anytime.