Buying Property Together as Joint Tenants or Tenants in Common
With house prices ever-rising, more and more people are purchasing properties together with family, friends or partners. This can be a fantastic arrangement – you can purchase property that you may not be able to afford alone, while sharing its ownership with loved ones you can trust. But before you commit to buying property together, it is essential to take into account potential changes to your relationship or financial situation. There are different legal options when it comes to buying property with other people, which may be more or less suitable depending on who you are buying with and what your financial circumstances are. The main two options are buying property together as joint tenants or tenants in common – read on to see what might be best for you.
Joint tenants
In joint tenancies, the property is shared equally between all owners. If one owner dies, their share of the property is immediately passed on to the remaining owners. However, in joint tenancies, each owner is held equally liable for ensuring payments are made on time, and both your credit scores will be affected by missed payments. You also cannot sell the property without the other owners’ consent unless you force a sale. This is the preferable arrangement for married couples, as full ownership of the property will automatically be transferred to the surviving spouse should one of them pass away. But, you don’t need to be married to form a joint tenancy – some people enter joint tenancies with unmarried partners, friends or family members, and up to four people can be named in a joint tenancy agreement.
Tenants in Common
Tenants in common own individual shares of the same property, rather than sharing the property equally between them. Some may own a larger share than others; for example, one may own a larger share if they put down a larger deposit or make larger payments towards the mortgage. If a tenant dies, their share will be passed to whoever it has been bequeathed to in the deceased’s will. Additionally, tenants in common can sell their share without needing consent from the other tenants. However, it is important to note that tenants in common are still jointly liable for mortgage payments, as is the case with joint tenancies. For groups of friends and unmarried partners buying property together, this is often a better option. These arrangements are much easier to alter should relationships or financial situations change, and tenants can own different proportions of the property to better reflect on their financial contribution and circumstances.
Can I change from a joint tenancy to a tenants in common agreement and vice versa?
Yes, it is possible to change your tenancy in this way. If you wish to sever a joint tenancy and become tenants in common, you must fill in a Form SEV with the other owner(s). If other owners do not wish to sever the tenancy, you can still do so by sending them a letter stating that you wish to sever the joint tenancy (called a notice of severance) and fill in the Form SEV yourself. To become joint tenants after previously being tenants in common, you will need to create a new trust deed (or update your trust deed if one already exists) with the help of a solicitor. Our conveyancing solicitors will be happy to help you complete the necessary work to change your tenancy.
Tips for Protecting your Property Assets
For tenants in common, a declaration of Trust in place will provide you with some security should there be any need for change in future. Declarations of Trust list how the property is shared between its tenants; if the property is sold, or one tenant wishes to buy out another, this document will outline how much money each person is financially entitled to. A cohabitation agreement can also be incredibly useful for cohabiting unmarried partners. A cohabitation agreement sets out who owns what aspects of the property. While it is not the most romantic aspect of a relationship, in the event of a relationship breakdown a cohabitation agreement will prove to have been a worthwhile investment, as it will save you valuable time and money. In a joint tenancy, you and the other owner have equal ownership of the property regardless of how much each party has financially contributed towards the purchase and maintenance. If you were to sell the property, you would be entitled to half of the proceeds each. You should take this into consideration before entering a joint tenancy.
Purchasing Property Together
Once you have decided on the perfect arrangement for you, you will need the help of both a mortgage adviser and solicitor. The mortgage adviser will:
- Assess your current situation
- Discuss your future aspirations or contingencies
- Source the best product on the market for you
- Process your full mortgage application all the way until the offer is received.
The conveyancing solicitor will:
- Review title deeds and other documentation
- Raise enquiries about the property with the vendor
- Comply with lender requirements and special conditions
- See your matter through to completion, including paying stamp duty and registering the title at the land registry
Starck Uberoi Solicitors work under the same roof with our sister company, Starck Uberoi Wealth, to combine fast conveyancing services with comprehensive mortgage advice.
How Starck Uberoi can help
Whether a joint tenancy or a tenants in common agreement is forward for you and your loved ones, Starck Uberoi Solicitors can offer you a streamlined conveyancing process complete with whole-of-market mortgage advice from Starck Uberoi Wealth. To find out more, please see our conveyancing and wealth pages. For an appointment with a conveyancing solicitor, call us on 020 8840 6640 or email us at solicitor@starckuberoi.co.uk. For an appointment with a mortgage advisor, call us on 020 8037 4027 or email info@suwealth.co.uk. Our offices are located in Brentford, Canterbury, Ealing and Belgravia and Richmond, all of which are easily accessible via public transport. Our partner, Raminder Singh Uberoi, can also offer a Notary Public Service at all of our offices.
