When two people purchase a property in England and Wales it is necessary to consider how they wish to “hold” the property.
There are two main options:-
If you purchase a property with your partner, husband or wife, you may wish to own as beneficial joint tenants. This means the Land Registry looks at you both as a single entity, as opposed to a couple and does not apportion percentages. In real terms this means if one of you should die the property will automatically pass to the sole survivor under the survivorship rules and a Will is not needed.
This particular type of ownership is ideal for married couples who have contributed equally to the purchase of their property and are content for the property to pass to each other, automatically on their death.
It is possible to sever a joint tenancy if your circumstances change in the future
Tenants in Common
Here two parties purchasing a property would actually specify the shares/percentages they wish to own in the property and could own as Tenants in common in equal shares or indeed, Tenants in common 60/40 or 30/70 or any percentage they agree upon.
This option is particularly useful where one purchaser has children from a previous relationship whom they wish to provide for on their death. Or indeed, where perhaps parents have gifted their grown up child a deposit to purchase their first home and some form of protection is required.
This option is also useful for family members, such as siblings who own property jointly.
If you chose Tenants in Common in unequal shares when purchasing a property, your Solicitor will recommend you enter into a Trust Deed to set out your intentions at the time of purchase and the shares you hold. This is the best form of protection for your investment in the years to come.
You will need to make a Will if you own property as Tenants in Common as your share will not automatically pass on death under the survivorship rules.
If you are considering purchasing a property jointly, if your circumstances have changed and you are not sure what is best for you now, discuss the options with your Solicitor before making a decision. A little extra consideration now can save a lot of worry and expense in the future.