When a property is purchased by two or more people for their own benefit they can own the property in two ways.
The most common method is where they own as 'joint tenants' (this is popular with couples) where the proprietors, be they two or more, do not have their own individuals shares in the property but are together 'the owner'. So if one of them dies, their interest in the property passes automatically to the survivor(s). Such shares pass according to property law and not according to the terms of the deceased owner's will or the intestacy laws.
The other method of joint ownership is known as a 'tenancy in common' where the owners each have their identifiable share in the value of the property, say 50/50 or 70/30.
With this method, on the death of one of the joint owners, their share forms an asset of their estate which will be dealt with according to terms of their will or the intestacy laws.
Tenancies in common are used, for example, where people buy a property together as an investment and would not necessarily want their interest in the property to pass automatically to their business partner but to whoever they wish to specify in their will. It is also possible to covert a joint tenancy into a tenancy in common and vice versa.
If people buy as joint tenants and then split up, the proceeds are normally divided equally between them. In the case of inequality of contribution, a 'declaration or trust' should be made to record how much each has put in, what their respective obligations are and how much of the proceeds each will be entitled to at sale.
Philip Popeck is a partner at Curry Popeck, Solicitors.
Call him on 020 8907 2000 or email him at philipp@currypopeck.com.
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