Joint Tenants or Tenants in Common: Understanding the Differences

Buying a property is a monumental occasion. Especially when it is your first home. It’s perhaps even more special when it is bought with a partner, family member or friend. This shared goal setting you on a path of new adventures.

When you plan to buy a property with someone else though, there is the common question of, “Are we joint tenants or tenants in common?” It’s understandable, each has its benefits and helps clarify the ownership status of the property, but which one would be best?

Well, in this edition of our blog, we’ll show the differences so you know what may work best for you.

What is joint tenancy?

Joint tenancy is where two or more people all own an equal share of the property they have purchased. Even if one person has paid more than anyone else for the deposit or the mortgage payments, the ownership share remains equal.

This means that when it comes to selling the home or making significant changes to the property, you’ll all have to act together to reach a decision.

What does tenants in common mean?

Tenants in common is where two or more people own a home, but the shares are not equal. This means you could have one owner with a 30% share and another with 70% for example. This form of ownership is normally worked out based on who contributed what share. In our example of a 70/30 split, the person who contributed 70% of the funds for the purchase will likely hold a 70% share of the property.

With separate ownership comes a little more freedom. Properties with tenants in common do not require each owner to come to a mutual agreement over selling the house, for example. Instead, each owner is free to sell or mortgage their share at any time without having to get the approval of the other residents. If a sale of the entire property happens, each owner receives their percentage of the proceeds from it.

Tenants in common can also alter their shareholding in the property if they wish. If it is mutually agreed, someone with a 30% share could increase to a 40% share if affordable for them.

Joint tenants vs tenants in common when someone dies

Should one of the owners die during the time you live in the property together, the type of ownership could have a large bearing on what happens next.

With joint tenancy ownership, the right of survivorship is automatically applied. This means that should one of the owners die, their share of the property is passed over to the remaining owner(s). There is no option for an owner to leave their share of the property in a will.

This sounds great for married couples, for example. Why would you not want your loved one to keep the home after you pass away?

For other joint owners, perhaps people who jointly purchased a house as friends, they may be thinking of passing their share on to somebody else. This is where tenants in common become advantageous.

With tenants in common ownership, there is no right of survivorship. Instead, each owner can name a beneficiary of their share of the property in a will. This can make things tricky when the property was lived in by a married couple.

If you are married and one of you passes away, if the property was owned as tenants in common, the deceased’s share may be passed onto other family members, making it harder for the remaining partner to live there as they may have hoped.

Can I change a joint tenancy to a tenancy in common?

You can, and it is perhaps more common than you may have thought. When couples split up, whether married or not, a switch to a tenancy in common allows shares for each owner to be established without the restrictions a joint tenancy has.

Both owners will have to mutually agree to the change and make an application for the change by completing the appropriate parts of the form from the Land Registry.

Can I change a tenancy in common to a joint tenancy?

Yes, but with this change, you must seek the agreement of the other owners and alter the information held in your deed of trust. The deed of trust is a legal document that states who owns what share of the property and how much money has been paid by each party for it.

Tenants in common will often have a deed of trust written up to prove their interest in the property. Changing to a joint tenancy will see this deed of trust reflect those changes, so nobody can make a claim against the others over shares of ownership.

What is better, joint tenants or tenants in common?

Neither is necessarily better than the other, as the benefits of each depend on your personal circumstances.

If, for example, you have plans for how you want to pass your share of the property on, perhaps to your children, you might want a tenancy in common. If you simply want the home to pass on to your partner, then joint tenancy may be better. That being said, nobody can predict the future, and should a divorce or split occur, then a tenancy in common may be more favourable. With the legal security that a deed of trust helps give, it can be a little easier to settle property issues in a divorce or separation.

You can always speak to a solicitor for further clarity should you be unsure what option suits you best.

Should you be joint tenants or tenants in common, looking for a quick way to sell, speak to Bettermove. Our team are the experts in securing you a fast house sale. We offer two smooth, stress-free options, and neither costs you a penny. We can either buy your property ourselves or present it to a network of cash house buyers. Either way, a sale is built around you to ensure your property goals are met.