If you are thinking about buying a property with another person or group of people you will need to consider which type of ownership structure is suitable for you and your co-owners. There are two ways in which a property can be held and as co-buyers you will need to decide whether to hold as joint tenants or tenants in common.
Under a joint tenancy the buyers own collectively the whole of the equitable estate which each other. This means that they do not own individual shares. Accordingly, if one of the buyers dies that persons share in the property passes to the survivor irrespective of any Will the deceased buyer may have made or of any entitlement in intestacy if a Will has not been made. In addition, when buyers holding as joint tenants decide to sell property, they will be entitled to equal shares of the proceeds of sale irrespective of the amounts that each buyer has put in. Typically, husbands and wives hold property as joint tenants particularly where they only have children by that marriage and there has been an equal contribution to the purchase price however this is always subject to each co-owner’s circumstances and wishes.
Tenants in Common
A tenancy in common is the opposite to a joint tenancy in that buyers do own separate shares which may be proportionate to the individual contributions that each party has made towards the purchase price. When buyers hold as tenants in common and one of them dies, the deceased buyer’s share will form part of the deceased buyer’s estate. This means that the deceased buyers share does not automatically pass to the other co-owners. Buyers holding as tenants in common often do so because they have separate dependents (like children from different relationship) who they wish to provide for in the event of their death. It is always important that people make Wills, but this is particularly important where property is held as tenants in common as the survivorship rule does not apply to this type of arrangement.
Both types of ownership have advantages depending on your personal circumstances and your relationship with your co-owners. Whether property is held as joint tenants or tenants in common it is important to note that the arrangement can be altered at a subsequent date if all parties agree.
Found the property of your dreams? Need some specialist advice from an experienced adviser? Our specialist team advisers will be able to provide further advice to help you to decide which type of ownership structure is right for you.
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