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Millions of couples unaware whether they own property as tenants in common or joint tenants

Written by: Paloma Kubiak
Millions of UK adults own a home with another person but many are unaware whether it’s as tenants in common or joint tenants. Here’s what you need to know.

Of the estimated 17 million adults in the UK who bought their property with another person, a quarter don’t know the legal structure of how they own their home.

When you buy a property with someone else, you can choose to be either joint tenants or tenants in common.

This confirms the type of legal ownership each person has over the property, setting out what happens to it in the event of the breakdown of the relationship or if one of the owners were to die.

According to new research by Ocean Finance, 63% of homeowners in the UK know they are joint tenants while 12% know they are tenants in common. However, a quarter don’t know the legal terms in which they own their home.

Here are the key differences:

Joint tenants

This is the most common type of joint home ownership in the UK. It gives equal rights over the property for each partner and equal ownership with each owning 100% of the property.

As a result, for joint tenants the ownership of property passes automatically to the other owner when one dies.  The share of the property can’t be passed onto a third party in a will while the other owner is alive.

Tenants in common

With tenants in common each owner has a fixed stake in the property – which could be 50/50, but doesn’t need to be. It’s common for partners to enter into this where one partner puts down a larger deposit when purchasing a home, making it possible for two people to jointly own a home together, with one person owning say 70% and the other owning 30% of the property.

This is also frequently seen when the parents of one or both partners help their child build their  deposit, as the percentage share of the property is agreed upon in advance, usually from the size of the deposit each side puts down, it helps secure the money from the parents to their child.

Another positive of being tenants in common is that if the relationship breaks down between the two homeowners, the financial split may be easier to resolve because the share of property ownership has already been agreed upon, even if the property has increased in value.

The way in which you own your property can also impact care costs. Local authorities have the right to recover costs for long term care from the sale of the property. For homeowners who are tenants in common, the local authority can only recoup costs from the share of the person who receives the care. If the house is jointly held, they could recoup costs up to the full value of the property.

In addition, unlike joint tenants, for those who are tenants in common the share ownership does not automatically go to the other if one owner dies. As a result, an owner can pass on their share of the property to a third party in a will.

Ian Williams, spokesperson for Ocean Finance, said: “The benefits of buying a house together as tenants in common are becoming better understood by homebuyers. With more couples getting financial support from families with their deposit, or putting in their own savings, splitting the ownership allows them to preserve their share. And for older borrowers it offers some protection from care costs.

“The good news is that it isn’t too hard for joint tenants to split their tenancy if they need to – you can either download the forms from the Land Registry and do it yourself, or get help from a solicitor or conveyancer.”

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