Buying a Property with Someone Else

When two or more people plan to buy property, there are two different ways in which the property can be jointly held. These are either as Joint Tenants where there is an automatic right of survivorship, or as Tenants in Common, where owners each own a distinct share.

Joint Tenants - If the property is held as joint tenants, all registered owners of that property own the whole of the estate with each other, and do not own individual shares.  Upon the death of one of the owners, the deceased’s share passes automatically to the survivor(s) and not under a Will or Intestacy.  This is known as passing by survivorship. For more information see Joint Ownership.

Holding the property as joint tenants is therefore suitable for married couples, civil partners or cohabitees in a stable relationship, but perhaps not for those who have children from a previous relationship.  However, there are other issues such as tax planning considerations which will need to be considered (especially for married couples) when selecting how to hold the property.

Tenancy in Common - This is where the registered owners hold their own distinct and separate shares in the property which may be left by Will to the surviving tenant(s) in common or to anyone else, or pass on intestacy in the absence of a Will.  Owning the property as Tenants in Common allows the property to be held in both equal and unequal shares to reflect monetary contributions and/or mortgage obligations.

Because the survivorship rule does not apply to a Tenancy in Common, tenants in common should also be advised to make Wills. For more information on making a Will, either speak to your Furley Page contact or visit Wills, Tax and Estate Planning.

Declaration of Trust  - If a property is held as Tenants in Common and particularly if it is to be held in unequal shares, it is advisable to have a Declaration of Trust drawn up. This document may include details of the parties respective financial contributions, the proportions each party will pay towards the mortgage (if any) and other household expenditure, how the proceeds of sale will be divided on a sale of the property, and the procedures for a later sale if one wishes to sell and the other does not. 

The circumstances of individuals will of course vary and we are happy to discuss the implications of a Declaration of Trust having regard to your specific circumstances.

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