Joint tenants v tenants in common – what’s the difference?

Understanding joint ownership

When two or more people buy a property together, they become joint owners. This can take one of two legal forms: joint tenancy or tenancy in common. These terms apply to ownership, not renting, and determine how shares in the property are held and what happens if one owner dies.

What is joint tenancy?

Joint tenancy means that all owners have equal rights to the entire property. There are no separate shares - each person jointly owns the whole.
If one joint tenant dies, their ownership automatically passes to the surviving owner(s) under the right of survivorship. This arrangement is common among married or cohabiting couples who wish property ownership to transfer seamlessly.

Key features of joint tenancy:

• Equal ownership of the property.
• Automatic transfer of ownership on death.
• One owner cannot sell or transfer their share without the other’s consent.

What is tenancy in common?

Tenancy in common allows owners to hold specific percentage shares of a property. For example, one person might own 60% while another owns 40%. Shares can be defined in a Deed of Trust and adjusted later if circumstances change.

If one owner dies, their share does not automatically transfer to the other owners. Instead, it passes according to their will or estate.

Key features of tenancy in common:

• Ownership divided into defined shares.
• No automatic inheritance; shares pass via a will.
• Flexibility to adjust ownership percentages.

What is the difference between joint tenants and tenants in common?

There is no distinction in a joint tenancy between the individual shares owned by each party. The property is owned wholly by each party. Tenants in common, however, do own specific shares of the property. Perhaps the most important difference between the two types of joint ownership is what happens if one of the owners dies.

In a joint tenancy this would mean that the share of the deceased automatically passes to the surviving joint tenant. There is no option for joint tenants to bequeath their share to any other individual as part of a legacy or estate. Tenants in common, however, can leave their share to beneficiaries such as children or family members.

Joint mortgages

Both forms of ownership can be linked to a joint mortgage, where all buyers are equally responsible for repayments.

Advantages of joint mortgages:

• Combines incomes, increasing borrowing power.
• Makes it easier for first-time buyers to access the property market.

Disadvantages of joint mortgages:

• Shared financial liability; if one person cannot pay, the other must cover it.
• One person’s poor credit history can affect the joint application.

Rights under joint ownership

All legal co-owners have equal rights of possession and occupation.

• One owner cannot sell or mortgage the property without the other’s consent.
• Major decisions - such as selling or remortgaging - must be agreed by all owners.
• Both parties appear as joint tenants at law on the title register.

Ending or changing joint ownership

Joint ownership can be changed or “severed” into a tenancy in common at any time.

• To change from joint tenants to tenants in common, serve a written notice of severance and notify HM Land Registry using Form SEV to place a restriction on the property.
• To change from tenants in common to joint tenants, all parties must agree and update the Deed of Trust through a conveyancer.

Frequently asked questions

How do I change a joint tenancy to a tenancy in common?

This often happens when married couples split up, a relationship has ended or when couples want greater clarity and flexibility about who owns what. To switch to a tenancy in common and establish shares for each party, the joint owners will need to effect a severance of the joint tenancy by mutual agreement. The joint owners should make an application to enter a Form A restriction, by completing and signing the relevant part of the Land Registry Form SEV.

How do I change a tenancy in common to a joint tenancy?

To do this you will need to have the agreement of the other joint owners, and change the terms of the Deed of Trust. A conveyancer can help you do this, and ensure that all the correct supporting documents are included in the application.

What is a Deed of Trust?

A Deed of Trust is a legal document that states how much money each party has contributed toward a property purchase. It also includes details about what should happen to this investment in the event of a change in circumstances. For example, if the property is sold, a relationship ends, or a joint owner buys the share of the other owner. People who choose to be tenants in common may arrange for a Deed of Trust to be drawn up so that their financial interests in the property are protected.

Is it better to have joint tenants or tenants in common?

It really depends on your personal situation. If you have children that you definitely want to leave a share of a property to, then a tenancy in common may work better for you. But if you want things to be less complicated, then it may be preferable to go for a joint tenancy.

Which tenancy is best for married couples?

Most married couples prefer to be joint tenants. There are no grey areas about who the property passes to in the event of one partner’s death, and many couples prefer to have this clarity. However, it must be said that for some older married couples tenancies in common offers greater flexibility, particularly when it comes to bequests.

Though no one wants to think about separation when they are buying a house together, tenancies in common do give couples who want it added legal protection. If one party holds a specific share in a property, divorce proceedings may be a little easier to negotiate.

Let us help you find your perfect property

For all the legal implications, it’s important to remember that buying a house together is exciting. Contact haart today to find out what’s available in your area and what we can do for you to realise that dream.