Buying a new property is probably the biggest financial commitment any of us make.
If you are buying as a couple it’s essential you choose the right type of joint ownership that properly reflects your situation. The type of ownership affects what you can do with your property if your relationship with a joint owner breaks down or if one of you should die.
Many people aren’t sure of the differences between buying as Joint Tenants or Tenants in Common. For example, many people assume a property will automatically go to their partner in the event of their death or they’ve got equal rights to a property in the event of a divorce. However, this is not necessarily the case, which is why you need to carefully consider which type of ownership best suits your circumstances and your relationship with your fellow buyer(s).
So which ownership type is right for you? Understanding the differences is key and can be summarised as follows:
Each owner has equal rights to the whole property
If one joint owner dies, property ownership automatically goes to the surviving owner
For the property to be sold, both owners must first agree to the sale and any proceeds from the sale are split equally
A joint owner cannot pass on their ownership of a property in their will
Tenants in Common
Ownership doesn’t have to be split 50/50: borrowers can own differing shares of the property
Property ownership does not automatically switch to the remaining owner if one joint owner dies
Once both owners agree to sell the property, the proceeds are split depending on the number of shares each owner has
Joint owners can pass on ownership of the property in their will
It’s worth pointing out that customers can change ownership type between Joint Tenants and Tenants in Common and vice versa by getting in contact with Land Registry.
For example, if customers who purchased as Joint Tenants divorce or separate and then want to leave their share of the property to someone else, they can switch to Tenants in Common
Conversely, if Tenants in Common get married and want to have equal rights to the whole property they can request a change to Joint Tenants
FOR MORE INFORMATION FROM THE GOVERNMENT CLICK HERE
You may also like to read my First Time Buyers page, CLICK HERE
My full guide to mortgages has lots of good information for you, CLICK HERE
For anything else please contact me for free advice and assistance CLICK HERE