Joint Tenants or Tenants in Common?

Often people will find that purchasing a property with someone is an exciting but daunting process. As part of the conveyancing process, you will be asked whether you would prefer to hold the property as ‘joint tenants’ or ‘tenants in common’. This may not be a consideration that is at the forefront of your mind but it should be a decision which is not taken lightly as each option can result in very different outcomes.

Differences between Joint Tenants and Tenants in Common:

Share of the property:

Joint Tenants

Both of you will have equal rights/shares in the property, no matter what your individual contribution is towards the deposit.

Tenants in Common

You own specific shares in the property and you have the option to hold the property in unequal shares.

A declaration of trust can be prepared to set out the share each co-owner holds in the property.

Right of Survivorship:

Joint Tenants

You are not able to leave your share in the property to anyone else in your Will.

Your share will automatically pass to the other joint tenant, by right of survivorship.

Tenants in Common

Your share in the property will pass to your estate on your death (and not automatically to the other person with a share in the property)

It is therefore important that you have a Will in place to stipulate who will inherit your share in the property.

Care home fees:

Joint Tenants

If the other joint tenant has sadly died, their share of the property will have passed to you by right of survivorship.

This means the whole value of the house can be means tested for care home fees and could result in you being liable to pay your own care fees in full.

Tenants in Common

If you hold your property as tenants in common and have a specific Will in place that considers care fees, there are options available to you to reduce the capital that can be taken into account by the Local Authority.

How to sever a joint tenancy?

If you currently own your property as joint tenants but would prefer to hold it as tenants in common, this can be facilitated by way of a Deed of Severance (and can be done with or without the agreement of the other joint owner).

If you would like further information or advice on any of the above, please contact our Private Client Team.