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This article was published on October 5th, 2023
Joint ownership of property has become increasingly more common in recent years driven by a variety of factors that reflect the evolving dynamics of the property market. One of the primary catalysts behind this trend is the soaring prices of homes in many areas.
As property values continue to rise, the dream of homeownership becomes more elusive for individuals working to save for a deposit on their own. In response to this, many people are turning to joint ownership as a practical solution. If this is something you’re considering, it’s important to understand the ins and outs of this arrangement before making a decision. In this article, we will delve into what joint tenancy ownership is and provide you with everything you need to know.
There are two types of joint ownership that you should be aware of; joint tenancy and tenancy in common.
With joint tenancy, co-owners have equal ownership interests in the property, and when one owner dies, their share is automatically transferred to the surviving owner(s). This is the most common form of joint tenancy ownership and is often chosen by married couples and family members.
Unlike a joint tenancy agreement, tenancy in common allows co-owners to have different shares in the property. Each owner can own a specific percentage of the property, and there is no right of survivorship. When one owner passes away, their share is not automatically transferred but instead becomes part of their estate, subject to their will.
There are many advantages to joint ownership such as sharing the financial responsibilities of property ownership, including mortgage payments, maintenance, and property taxes. However, it is also important to remember that joint ownership can come with its difficulties. With joint ownership, decisions related to the property must often be made collectively. This can lead to disputes if the co-owners have differing opinions on matters such as property maintenance, renovations, or even the decision to sell.
The rise in friends purchasing properties together has grown significantly over the years, as it has allowed more people to onto the property ladder, particularly at a time when mortgages are at an all-time high. However, whilst it has its advantages, there is a lot of careful consideration needed for this type of purchase.
If you’re choosing to purchase a property with a friend, the most popular type of joint ownership option tends to be tenants in common. This is because the shares in the property are determined based on individual contributions.
Tenancy in common also does not include the automatic right of survivorship, which means that if one friend were to pass away, their share of the property would not automatically transfer to the other co-owner(s). This flexibility and customisation make this type of joint ownership a popular choice among friends who wish to purchase property together while maintaining a clear understanding of their ownership shares and responsibilities.
If you do opt for this type of ownership you should have a declaration of trust and a cohabitation agreement drawn up to protect your financial investment. This protection is essential in cases of a relationship breakdown, instances where one co-owner cannot meet their share of the mortgage, or if you are looking to sell the property.
For more information about the do’s and don’ts of buying a home with a friend, click here.
Navigating joint tenancy ownership can be complex, and it’s crucial to make informed decisions to protect your interests and those of your co-owners. Consulting with an experienced conveyancing solicitor and an estate agent can provide valuable insights and guidance tailored to your situation.
Here at Thorneycroft Solicitors, we have dealt with a range of property transactions including individual and joint ownership. Our team of experts are well-positioned to guide you through the process, whether you’re considering joint tenancy ownership, want to understand its implications or need assistance with legal documents.
We offer a free consultation to discuss your specific situation, answer your questions, and provide tailored advice to help you make the right choice for your property ownership needs. To get in touch, give us a call on 0330 058 0118 or fill out our simple enquiry form.
