Buying a property is an incredibly exciting time however one of the most important questions you will need to consider when purchasing a property with someone else is whether you would like to own the property as Joint Tenants or Tenants in Common.

Both options have significant legal implications which you will need to be aware of.

Joint Tenants

Joint Tenancy means that the property owners own the whole of the property equally and there are no distinct or divisible shares. In the event of the death of one owner, the whole of the property will automatically pass to the other owner who will own 100% of the property. This is known as survivorship. The deceased’s share in the property will immediately pass to the surviving co-owner irrespective of any direction in their Will or, in the absence of a Will, under the rules of intestacy.

Tenants in Common

Tenancy in Common means that each owner will own a separate share in the property. These shares may be equal or different percentages and will usually represent the amount of money contributed towards the purchase price. Owners may individually sell or transfer their shares, provided the other joint owner consents. Unlike joint tenancy, in the event of the death of one of the owners the deceased’s share does not pass to the other surviving co-owner but remains part of the deceased’s estate and will pass as directed under any Will or to his or her next of kin as appropriate under the rules of intestacy.

Which option is right for me?

Generally speaking, married couples or couples in a civil partnership may wish to opt for joint tenancy in light of the survivorship rule however this may not be ideal for friends or business partners who might prefer tenants in common as the more appropriate choice. Every case however is unique and the particular circumstances should be considered carefully before making a decision.

Where joint purchasers choose to own property as tenants in common in unequal shares they may also wish to consider recording each party’s entitlement to equity in a separate declaration of trust. Couples should also consider what would happen in the event of separation and whether they should enter into a co-habitation agreement to set out their rights and financial agreements in relation to the property both during and following cohabitation and if they decide that they no longer want to live together.

Whatever your particular circumstances are, our property team would be delighted to provide expert advice to help you decide which option is best for you.