If you are buying a property jointly with someone else you must take the time to give proper consideration as to how you will hold the property with the other party.
Jointly owned property creates a trust of land and there are several ways in which you can hold a property between you:-
- Joint Tenants – if one of you dies the survivor will automatically receive the other’s share in the property. It will pass outside of any provisions made within your will and you cannot specify specific shares in the property.
- Tenants in Common in equal shares – in this scenario you each own a 50% share in the property and are each able to leave your share by will to whomever you choose. If you do not have a will your share will pass in accordance with intestacy rules.
- Tenants in Common in unequal shares – as option 2 above however you can state specific unequal shares for example 60/40.
If you proceed by way of options 2 and 3 It is also advisable to enter into a document called a declaration of trust which can specify the shares and any other agreements in the event of a sale or transfer of the property.
Unfortunately relationships sometimes do break down and if you haven’t sufficiently protected your investment then on a sale of the property you may not get back what you invested. This is important to consider not only in regard to your own personal investment but also in respect of any monies that may have been gifted to you by a relative in order to assist you with your purchase.
Consideration should also be given to what you would like to happen to your investment in the event of your death. Do you want your interest in the Property to pass automatically to the surviving joint owner? If you have children and you choose to hold the property as Joint Tenants your children will not inherit any interest in the property and this may not be your intention.
If the property is your main or only asset you need to consider any maintenance arrangements for children or other dependants following your death.
When you instruct us to act for you in connection with your purchase we will send out a Joint Ownership Form to you to complete to confirm how you wish to hold the property.
Please take the time to read this very carefully and if you require further guidance or information on how you should hold the property before completing the form then please do let us know.
It goes without saying that purchasing a property is a major financial investment and we strongly advise that you make a will if you haven’t done so already or review any existing wills to ensure everything is up to date and accords with your wishes.
For any further advice contact our Specialist Team on 0800 088 6004.