Are you thinking of buying a property jointly? If so, here are some facts which may assist you? When two or more people purchase a property they have to decide in what legal capacity they will own the title of the property. The choice is an important one since it will have an affect on what happens should the property be sold or should one owner die during ownership of the property. Although we naturally hope that people will never separate or die, disputes can arise at a later stage as to who is entitled to what from the proceeds of sale of the property which can result in costly legal battles. It is therefore essential that you discuss fully and openly the various joint ownership options open to you BEFORE you have committed yourselves to the purchase/acquisition of the property. There are 2 ownership options, Tenants in Common or Joint Tenants; Tenants in Common: If you purchase as Tenants in Common you will both still be legal owners of the property but in separate shares. The shares you own in the property can relate to the proportions you put into the purchase or not, as you decide. The shares can be equal (i.e.50/50) or indeed unequal (i.e. 60/40, 90/10 etc). If one of the joint owners dies, his/her share will not go automatically to the surviving owner(s). Instead, it will go to whoever they have nominated in their will. If they have not made a will, then the rules of intestacy will determine who inherits the property, which could have an unforeseen impact on the deceased person’s partner, family, and/or dependents. The joint owners should agree the extent of each person’s share of the property, which can be divided in either equal or unequal shares. It is recommended that a separate Declaration of Trust should be drafted to reflect your wishes if you choose this option. Joint Tenants: To purchase as Joint Tenants would mean that you both hold identical legal interests and effectively both own the whole of the property. Therefore, if one of the joint owners dies, his/her share of the property (which will be an equal division between all the property owners) automatically goes to the surviving owner(s) irrespective of any other written document or Will. However, it is important to note that the joint tenancy may be converted to a tenancy in common at any time by any one or both parties, in which case the probability would be that you would then own the property in 50% shares. As you can see from above buying a property together is not as simple as it seems, therefore, it is important that you make the right decision. AWD Law are experts in property related matters so please contact us on 01329 232314 with any queries in this respect.
Posted on: Fri, 21 Jun 2013 14:48:01 +0000
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