Owning a property with another person, for instance a spouse, features an essential question to be answered before the property has been acquired – in what way will you own the property?
This can be split into two possible answers – joint tenants and tenants in common – and I will be exploring the main difference these have.
Joint tenancy features multiple persons owning the whole of the property each. Tenants in common however, only own a proportion of the property respectively. This is a set share (ie. X owns 80%, Y owns 20%) and depends upon what the owners decide, but unless otherwise indicated it is presumed to be an equal share of the property.
The main distinction between these is the effects they have when passing on the property, and is best expressed in terms of wills and survivorship. Under the scenario of X and Y, should X pass away and leave a will giving their property to another person, the outcome would depend upon the way in which the property had been owned.
A joint tenant situation would mean that X’s legacy under the will would be obsolete. X and Y both owned 100% each and so Y retains the property and takes sole ownership – the survivorship principle. Holding property as tenants in common however, means that X could leave the property, at least in part, to someone else. In this instance, X’s share passes under the will. This is not as drastic as it sounds, with Y’s interest still remaining.
While this is a very brief outline of the two, there are many different aspects which can be considered, such as a life interest protecting the remaining tenant in common. Both possibilities can be very beneficial to owners, but it is important to get the full picture and understand the advantages and disadvantages of these in relation to your situation – getting legal advice can ensure that the decision you make is an informed one and ultimately, the right one.