Property – Joint ownership and survivorship

Sharing a home with your partner is one of the most important issues to think about, and ideally, your legal position should be clear from the beginning. The implications for not protecting your rights could critically affect your circumstances should the relationship come to an end.  There are important things to consider.

Getting a mortgage together

Mortgage lenders tend to treat cohabitants broadly the same as married couples. Where you may encounter a difficulty is in the insurance requirements that go with the mortgage. Some mortgage lenders require that you have life insurance as a condition of the loan. Single men are treated as a higher risk by insurance companies. It is possible to get past this issue by choosing a mortgage that does not have a compulsory insurance clause.

Buying together

If you are planning on buying a property together for the first time, you will need to decide how you are going to own the property, agree on it, and make this clear in the documents that are drawn up beforehand. It is always a good idea to make a Will but especially so if you own property.

Joint ownership, rather than putting the property in only one name, would ensure that each partner has a legal share in the property. If you were to split up and the property is in one person's name only, legally the non-owner has no right to a share of the property. This situation can be altered if an agreement is drawn up or if 'trust principles' apply.

There are two types of joint ownership:

Beneficial Joint Tenants

This means that the whole property (and the proceeds of its sale) belong to both of you as one. Neither of you have a separate share, which you can sell or leave to anyone else in a will. If one of you dies, the other becomes the owner of the whole property. This happens automatically without any further formality. This type of ownership suits most married couples.

Tenants in Common

This still means that the property is owned jointly but here each of you has a separate unequal share. If one of you has contributed more money towards buying the property, you may decide that it is fairer to reflect this in your shares: so you could have one of you owning 30% and the other 70% of the property.
If the property is owned like this and one of you dies, that share can be passed on in that person's will or, under the rules of intestacy, if no will has been made.
If a property is owned as tenants in common it is important for there to be a separate document or deed setting out those shares in the property and how the proceeds of sale would be divided if the property was sold. Such a document is usually called a 'Trust Deed' or a 'Declaration of Trust'.

If you choose Tenants in Common it is important to:

1) Make a 'declaration of trust' - Your solicitor will be able to draw up this legal document that will set out each person's share of the property and the procedures for selling if one partner decides s/he wants to sell while the other does not.

2) Make a Will - Because this way of owning property does not make your partner the automatic beneficiary of your share of the property, it is very important that you both make wills to say what you would like to happen to your share should you die.

Owning together

If you have already bought a property, you may not be sure how you own it. It is a good idea to find out...

How do you find out how you own a property?

For most properties there is a record of ownership at HM Land Registry. Ask your solicitor to get a copy from HM Land Registry to check up to date information.

Moving in together

If your property is already owned by you and/or your partner, and one of you has moved into that property, it is likely that the property is in that person's name. This is something that you need to talk about, especially if you or your partner have begun to make contributions towards the mortgage, bills, and/or general maintenance of the property.   You may wish to make a Cohabitation Agreement (see the separate webpage on this topic).

Changing the way you hold the property

Try to agree at the beginning what the original position was (i.e who owned the property) and what each of you agree the new arrangements are. Make a short written record of your agreement and give this to your solicitor to record in the form of a declaration of trust.

You may be able to change a Joint Tenancy into a tenancy in common at a later date but you will not be able to change a Tenancy in common into a Joint Tenancy.
 
For further advice on joint ownership contact one of the solicitors in the Family team at GoodyBurrett LLP on 01206 577676 or email law@goodyburrett.co.uk