Joint Tenants or Tenants in Common: What's the Best Way to Buy Property Together?
Buying a property with a partner, family member, or friend is a big step. But have you considered how you'll legally own the property? In England and Wales, you have two main options: joint tenancy and tenants in common. At Pinkney Grunwells, we've been guiding Yorkshire families through these decisions for over 85 years. Let's break down the differences and help you decide what's best for you.
Joint Tenants: All for One, One for All
Joint tenancy is the most common way for couples to own property. It means you both own the entire property together.
Key features of joint tenancy:
- Right of Survivorship: If one owner dies, their share automatically passes to the surviving owner(s), regardless of what their will says.
- Equal Ownership: All joint tenants have equal rights to the property.
- Single Legal Entity: Joint tenants are treated as a single legal entity for property ownership purposes.
When is joint tenancy a good choice?
- Married couples or civil partners: Often the simplest way to ensure the surviving partner inherits the property.
- Long-term relationships: Where you want your partner to automatically inherit your share.
- Simplicity: It avoids potential complications with inheritance and probate.
Tenants in Common: Your Share, Your Say
Tenants in common allows each owner to own a specific share of the property. These shares don't have to be equal – you could own 60% and your partner 40%, for example.
Key features of tenants in common:
- No Right of Survivorship: Your share of the property passes according to your will, not automatically to the other owner(s).
- Unequal Shares Possible: Ownership can be divided in any percentage you agree upon.
- Independent Ownership: Each tenant in common can deal with their share independently (e.g., sell it or leave it to someone in their will).
When is tenants in common a good choice?
- Unmarried couples: Where you want to ensure your share goes to your children or other family members.
- Friends or family buying together: Where each party contributes different amounts to the purchase.
- Investment properties: Where you want to control who inherits your share of the investment.
- Complex family situations: Such as second marriages or blended families.
- Tenants in Common and Care Fees: Potential Benefits
One important consideration with tenants in common is how it can affect potential care fees in the future. If one owner requires long-term care, the local authority may assess their assets to determine if they need to contribute to the cost of their care.
Protecting a Share for Heirs
As tenants in common, each person's share is considered part of their estate. This means that only their share is potentially at risk to cover care fees, not the entire property value. This can help preserve some of the property's value for their beneficiaries.
Declaration of Trust
A declaration of trust is crucial. It clearly outlines the ownership percentages and the intentions of the owners. This can provide strong evidence of each person’s stake in the property, which is important when dealing with care fee assessments.
It's worth noting that local authorities will look closely at any arrangements that appear to be designed to avoid care fees. Seeking professional legal advice is essential to ensure that your arrangements are sound and compliant with the law.
Severing a Joint Tenancy
It's possible to change a joint tenancy into a tenancy in common. This is called "severing" the joint tenancy. This might be necessary if relationships change or if one owner wants to protect their assets.
Seeking Legal Advice
Choosing between joint tenancy and tenants in common is a significant decision. At Pinkney Grunwells, our experienced property team can help you understand the legal implications of each option.
We understand that buying a property is a big investment, and we're here to guide you every step of the way. Contact Pinkney Grunwells today. Call us or visit one of our local offices to learn more. With five offices across North Yorkshire, we're your local legal experts.
*PLEASE NOTE* This is intended as general information and expert advice must be sought by the reader before committing to a decision. We cannot be held responsible for any financial losses as a result of not doing so.
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