Thinking of buying a property in more than one name?

Buying a property is a big commitment and there are many important decisions to be made throughout the process.

One of them is how the property is going to be owned if there is to be more than one owner.

Maybe you are buying a property with a loved one? If so, this is an exciting time and you may not want to consider what might happen to the property if one of you passes away or if the relationship were to break down but by considering this now, you will ensure that you or your loved ones are not met with any surprises in the future.

There are two options to consider.

Joint ownership, more commonly known as ‘Joint Tenants’, is where each joint owner owns the whole of the property. The implications of this are that when one owner dies the ownership of the property falls to the other owner, no matter the wishes left in the Will of the deceased.

Ownership in common is usually known as ‘Tenants in common’.  Each joint owner owns a separate and distinct share of the property. They can agree to own equal or unequal shares of the property, for example 50% each or 80% and 20%. When one owner dies their share of the property is passed to who is named in the deceased persons Will, or the next of kin if the deceased owner did not have a Will. It is therefore important that if you choose ‘Tenants in Common’ that all owners have a Will and specify what happens to their share in the property upon their death.

So how do you choose what type of ownership is right for you. The factors that you should consider are if you are married, if you have children from previous relationships, if one owner put in more for the deposit or if there are unequal contributions to the mortgage payments.

If you decide to own the property as ‘Tenants in Common’ then it is recommended that the agreement between owners is set out in a Declaration of Trust, whereby it will be formally stated the share in the property to be held by each owner and how the proceeds will be split upon sale of the property. This will prevent any issues arising at a critical juncture in the future.

If you are unsure how you own your property, need some advice on your specific circumstance or would like a Declaration of Trust drawn up please do not hesitate to contact our Residential Property Team on 0800 302 9448 , who will happily help.

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