Joint Ownership of Property – for couples and investors!
If you are considering purchasing a property with your spouse, partner, relative or friend, either as a home to live in or an investment property, there are some important things you need to know.
When you buy a property with another, you will both be legal owners of the property. However, there are several ways in which you may ‘own’ the equity.
Beneficial Joint Tenants
With this type of arrangement, the equity is owned as if by ‘one person’; that is, each owner does not own a specified share of the equity. This type of arrangement means that, if one owner died, the property would pass by survivorship to the other(s). This type of arrangement usually suits the needs of spouses and partners.
Tenants in Common holding equal shares
A second common alternative is to hold the equity in equal shares; that is, each would own a specified 50% share of the equity. This type of arrangement means that, if one owner died, their share would not automatically pass to the other(s) by survivorship but would be administered in accordance with the deceased’s will (or under intestacy). This type of arrangement usually suits the needs of those who are purchasing an investment property where you have each contributed equal capital or similarly in circumstances where partners have contributed equal deposit monies.
Tenants in Common holding unequal shares
Finally, it is possible to own the equity in unequal shares; that is, each could specify exactly how much of the equity would be owned by whom. This type of arrangement would mean that, if one owner died, their specified unequal share would be administered in accordance with the deceased’s will (or under intestacy). This type of arrangement usually suits the needs of partners who are contributing unequal deposit monies or investors who are contributing uneven capital.
The need for a Will
Even when you own property as Beneficial Joint Tenants, the need for a will is vital when one is a property owner. A will allows you to have a ‘say’ in what happens to your property should the worst happen, as well as allowing you to make arrangements in relation to your other assets and even the guardianship of your children. We always recommend that you have a will.
If you are thinking about purchasing a property with another person, please contact our Conveyancing Department who will be able to provide further advice and a no-quibble quote.