Conveyancing - Buying Property Together

There are three possible ways to register joint ownership:

1. Register the property in the sole name of one of the owners, holding it in trust for both
2. Register as joint tenants
3. Register as tenants in common

The first option is unlikely to be suitable, unless further provision is made for the party or parties not being registered, as it offers him or her little or no proper legal protection. At the very least, the unregistered owner should have his or her interest protected by a trust deed, with a note of the trust being made on the title register.

This will effectively prevent the registered owner from dealing with the property, without the knowledge and consent of the unregistered owner. The trust deed may also stipulate who may live at the property, pay outgoings and undertake necessary repairs and maintenance.

It should be noted that unregistered owners may acquire rights and interests in property, without there being any trust deed. A spouse (including here a civil partner) may also register a note of his or her matrimonial interest in a property.

Joint tenancy is favoured by spouses, civil partners or those in other long term relationships, as this creates a right of survivorship. The property is not seen to be shared between the parties, but each effectively owns the whole of the property. Because there is no distinct share, no part of the property will belong to the estate of the joint tenant who is first to die – that person’s share passes automatically to the surviving joint tenant, irrespective of the terms of the will of the deceased.

It is possible to sever a joint tenancy and thereby convert it into a tenancy in common. Unless specific provision is made on severance, the net proceeds of any sale of the property will then be split equally between the parties, regardless of the initial contributions made to the purchase.

A tenancy in common is most commonly used by business partners and in situations where parties do not wish the right of survivorship to apply, for example parties who are not cohabiting, who are not in a long term relationship or who want to be sure that they can make adequate provision for their respective loved ones in the event of their death.

This is because each registered owner holds a quantifiable share in the property, which can be given away or sold during his or her lifetime or left by his or her will.

The parties may define their precise shares in the property, and are advised to do so, especially if unequal contributions to the purchase price are being made. This said, unless the contrary is stated or evidence to the contrary is proved, a court will usually presume that tenants in common hold shares in the property in proportion to the original contributions to the purchase price.

If co-owners subsequently marry, their respective shares in the property may be varied by the Court.

Should co-owners (whether the property is held under a trust, as joint tenants or as tenants in common) be unable to agree whether the property is to be retained or sold, a statutory trust for sale requires a realisation. This is because the law recognises joint ownership of property only reluctantly and prefers joint ownership and division of the money to be realised on a sale of it.

One co-owner may always, in such a situation, seek to purchase the share of the other.