Law Articles

Understanding the difference between Joint Tenancy vs. Tenancy in Common 18/06/2024

In the realm of property ownership, the legal framework governing ownership structures can significantly impact rights, responsibilities, and future outcomes. There two common forms of property ownership are joint tenancy and tenancy in common. While both entail shared ownership, they possess distinct characteristics that individuals should understand before making decisions regarding property acquisition.

Joint Tenancy

Joint tenancy is a form of property ownership where each party owns an undivided interest in the whole property. Key to joint tenancy is the right of survivorship, which means that if one owner passes away, their share automatically passes to the surviving owner(s). This process occurs irrespective of any provisions made in a will.

Tenancy in Common

Tenancy in common, on the other hand, grants each owner a distinct, separate, and identifiable share of the property. Unlike joint tenancy, there is no right of survivorship. Upon the death of one owner, their share passes according to their will or intestacy laws rather than automatically to the surviving owner(s). In tenancy in common, each owner can hold different proportions of the property, which may reflect their financial contributions or other agreements. This form of ownership allows for greater flexibility in estate planning and distribution of assets.

What are the Key Differences?

1. Survivorship Rights: The most significant distinction between joint tenancy and tenancy in common lies in survivorship rights. In joint tenancy, the surviving owner(s) automatically inherit the deceased owner's share, while in tenancy in common, the deceased owner's share forms part of their estate.

2. Equal Shares vs. Individual Shares: Joint tenancy typically entails equal shares among owners, while tenancy in common allows for individualised shares based on various factors such as financial contributions or agreements among the owners.

3. Flexibility in Estate Planning: Tenancy in common offers more flexibility in estate planning since each owner can determine the disposition of their share through a will.

4. Ownership Transfer: In joint tenancy, ownership transfer occurs seamlessly upon the death of an owner, while in tenancy in common, it involves the legal process of probate.

Understanding the differences between joint tenancy and tenancy in common is crucial for individuals contemplating property ownership. Each form of ownership carries distinct implications for estate planning, property distribution, and legal rights.

Before choosing an ownership structure, seek legal advice to understand the implications and choose the most suitable option based on your circumstances. Consider your long-term objectives and how each ownership structure aligns with your estate planning goals. If you prioritise ensuring specific beneficiaries inherit your share of the property, tenancy in common may be more suitable. If multiple parties are contributing different amounts towards the property purchase, tenancy in common allows for a fair distribution of ownership based on these contributions. Open communication among co-owners is essential to clarify expectations, responsibilities, and any potential changes in ownership arrangements.

If you already jointly own a property with someone, and you want to find out whether you hold the property as Joint Tenants or Tenants in Common, the easiest way to find out is to request Official Copy Entries from the Land Registry. The title deeds will show the names of the people who own the property and, if you are Tenants in Common, it will have similar wording to: “no disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court”. If there is no such wording in the title deeds, you own the property as Joint Tenants.

The Land Registry charges a nominal fee for the title deeds and the turnaround time is very quick – usually less than a day if you apply for it online. We recommend you keep a copy of the title deeds for future reference because it contains other useful information you may need, particularly if you wish to divorce, dissolve your civil partnership or your relationship has ended.

It is possible to sever a Joint Tenancy (thereby creating a Tenancy in Common) without the other party’s consent however, we strongly suggest you seek legal advice before doing so to fully understand the consequences.

For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.