What Are Joint Tenants & Tenants In Common?

When it comes to property ownership, two predominant options emerge: joint tenancy and tenants in common.

What Are Joint Tenants & Tenants In Common?

Each option carries distinct implications, influencing matters such as inheritance planning, co-owner remarriage, and the division of property. This guide delves into the characteristics of these ownership models, elucidates their benefits, and provides insights into the scenarios where one might be preferred over the other.

Joint Tenancy: Unified Rights and Continuity

Joint tenants, often referred to as beneficial tenants, possess equal rights to the entirety of the property. In the event of one owner’s passing, their share seamlessly transfers to the surviving co-owner. The benefits of joint tenancy include:

Probate and Court Avoidance

Upon the death of one owner, the property transfer to the surviving owner occurs outside the probate process, potentially saving time and costs associated with court proceedings.

Shared Responsibility

Joint tenancy fosters a sense of shared responsibility for the property, ensuring that both co-owners contribute equally to its maintenance and upkeep.

Continuity

The ownership structure allows for the uninterrupted occupancy of the property by the surviving co-owner, promoting stability.

Written in August 2023 by:

Sam Chester

Tenants in Common: Customised Ownership Shares

Tenants in common ownership grants the flexibility to assign specific percentages or shares of the property to each owner. This arrangement is especially beneficial in scenarios where co-owners have disparate financial contributions, inheritance considerations, or future planning concerns. Key advantages include:

Inheritance Planning

Tenants in common allow individuals to specify who inherits their share of the property after their passing. This feature is advantageous for protecting a share from being inherited by a co-owner’s new spouse or from being utilised for care fees.

Customised Ownership

With tenants in common, co-owners can tailor their ownership shares to reflect their financial investments accurately. This is particularly useful when one party contributes a larger deposit than the other.

Why Choose Tenants in Common?

Opting for tenants in common ownership can be advantageous in scenarios where:

Inheritance Protection

Individuals who want to ensure that their share of the property passes directly to their children, avoiding potential complications from remarriage or care fees.

Unequal Financial Contributions

Co-owners who have contributed varying amounts towards the property’s purchase can assign ownership shares that reflect their respective investments.

Making the Transition

Transitioning from joint tenancy to tenants in common is a relatively straightforward process. This change doesn’t impact mortgages or the property’s saleability.

While some equity release providers might not accept tenants in common arrangements (though this is changing), the advantages of tailored ownership often outweigh this limitation.

Empowering Ownership Choices

Understanding the implications of joint tenancy and tenants in common empowers property owners to make informed decisions aligned with their financial goals, family considerations, and long-term aspirations.

By selecting the ownership model that best suits their circumstances, individuals can navigate property ownership with clarity and confidence.

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Attention Please!!!

The content within this article is as accurate as the date it was written. To ensure the most up to date information, you should consult with one of the experts that we work with as every lender and their polices are different and can be changed or amended without notice.

This website is for information only and does not constitute financial advice. Our mortgage advisers are all fully qualified to provide mortgage advice in accordance with the Financial Conduct Authority (FCA) regulations. We only exclusively operate with businesses that are authorised and regulated by the FCA. All advice offered will be unique to your individual circumstances.

Some Buy to Let mortgages are not regulated by the FCA. You should carefully consider securing other debts against your home. If you do not keep up your mortgage repayments, your home may be repossessed. Equity released from your home will also be secured against it.