HSBC-300x200-1
Paragon-300x200-1
natwest-300x200-1
The_Mortgage_Works-300x200-1
Barclays-300x200-1
Precise-m-300x200-1
kensington-300x200-1
interbay-300x200-1
Landbay-300x200-1
Leeds_Building_Society-300x200-1

Joint Ownership of Property

Joint ownership is an excellent solution for potential property owners who find the dream of owning out of reach individually. You may also consider joint property ownership for other reasons, such as investment.

Should you choose to go down this route, it's essential to understand the nuances of ownership and work with a solicitor to ensure your interests in the property are captured and protected. Our Conveyancing solicitors in London can help you register the property accurately and ensure all the necessary legal steps are followed.

What is Joint Ownership of Property?

Joint ownership property is precisely what it sounds like. It applies when two or more people become the legal owners of a property.

There are two main types of joint ownership: tenancy in common and joint tenancy. When you buy a property with your partner or friend, you will need to decide whether to own it as tenants in common or joint tenants. A conveyance solicitor can help you understand the differences between the two types of joint ownership and which one best applies to your situation and circumstances.

It's important to understand that these arguments will have different consequences, even for a house sale, the death of one of the owners, or the end of a relationship. So, it’s essential to carefully consider the two options before buying property.

Tenants in Common

Tenants in common is an agreement mainly used when purchasing buy-to-let homes or when buying a property with friends or relatives. As tenants in common, you will each own a specific share of the property, which is usually about 50%, but it can vary depending on your circumstances.

For instance, if you co-own a property with two of your children, you may decide to purchase a 50% share while your children each have 25%.

When you own property as tenants in common, you'll also have control over how your share is distributed after you pass away. While this is a hefty decision, it is reassuring to know that your loved ones will benefit from your share when you're gone.

Additionally, if you need full-time care in the future, a joint tenancy would help you save on care home fees. This is because you will be means-tested against your share rather than the whole property.

For tenants in joint agreements, keeping a record of your contribution is highly recommended. Our experienced conveyance solicitors can help you write up a deed of trust to ensure you can protect your investment.

Joint Tenants

The second type of joint property ownership is the joint tenant. It's a more popular option for couples who are purchasing property together. It is mainly because both individuals will own the entire property without any specific shares.

If you and your partner or spouse plan to leave property to each other when you die, a joint tenancy agreement could be the best choice, as the right of survivorship will be applied. This means that your significant other will automatically be entitled to the home you share.

However, if you have children from a previous relationship, they may miss out on inheriting your property.

If you already have a joint tenancy and want to end it, you can change your agreement to a tenancy in common. Our conveyance solicitors can help you with the process.

How a Joint Ownership Process Works

Before investing in a joint-ownership property, it's essential to understand how the process works and the legal requirements associated with it.

The basic requirements of a joint ownership arrangement are as follows:

  • Up to 4 friends or siblings can buy a property together (subject to any lender’s requirements)
  • Your savings for the property purchase will be pooled together to provide the deposit required for the selected property.
  • Mortgages are available for this co-buying agreement.

If you meet the minimum requirements for the joint ownership property, the next step is to understand how the process works:

Deposit

You and your co-buyers will pool your savings to pay the deposit on the property.

Shared Responsibility

You and your co-buyers would be equally responsible for the mortgage on the property plus the outgoings and repairs. We suggest that this be set up and recorded in a trust deed in the simplest way possible so you can easily interpret it in the future and determine what was agreed upon.

Trust Deed

You must prepare a trust deed to record various aspects of the ownership. Our trained conveyance solicitors can help you with this part of the process. The trust deed should include crucial details about the ownership, such as:

  • Size of deposit paid by each co-buyer
  • Mortgage responsibilities and what each co-buyer is expected to pay.
  • The procedure for leaving the co-ownership arrangement
  • What happens if everyone decides to sell
  • Financial split on completion of the sale.

The trust deed ensures that your interests in the property are protected in a predetermined way if the co-buying arrangement no longer remains feasible.

Your Mortgage Responsibilities

The trust deed should establish each joint owner's obligations to contribute to the mortgage. It is important to note that when a property is mortgaged, all the co-buyers are jointly and severally liable for the mortgage repayments. This means that if one person stops contributing to the mortgage, the remaining joint owners will be responsible for that person's share.

Although many joint ownerships start like other joint ventures with optimism and trust, a conveyance solicitor will help you plan for the unexpected and ensure you can manage the joint ownership amicably.

The solicitor will also ensure that all the legal steps are followed during the purchase and transfer and order the necessary searches to ensure that the property is checked out and that you clearly understand what you're investing in.

The solicitor will also liaise with the seller's solicitors and other parties involved in the transaction to ensure smooth operation.