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Joint Tenants or Tenants in Common, what is right for you?
Buying a home with your partner or family member is an exciting and a life changing experience. It is therefore to know the different forms of legal ownership and to understand how they both work before you make an informed decision.
Joint tenants is exactly what it describes. If you choose this form of ownership, you will own the property jointly and equally with the person you are buying with. Together you will both own the property wholly and neither of you will have an identifiable share.
If and when you decide to sell the property you will both be entitled to half of the sale proceeds. This is not dependant on how much either of you have contributed to the purchase of the property. This may be a cause of dispute if you have contributed unequally amounts.
The essential point to note about joint tenancy is that it operates under the rule of survivorship. If one of the owners pass away their share will pass automatically to the surviving owner. There is no way to leave an interest under joint tenancy in a will. It is worth noting that a joint tenancy can be severed at any time with a notice.
Tenants in Common
The alternative form of ownership is tenants in common. This is normally a 50% share each however, it can be unequal depending on the financial contribution you have made to the purchase. This can be significant in reducing causes of dispute in the future and can be supported by a further declaration known as a Declaration of Trust. This document can explain how the proceeds will be distributed to the owners upon sale of the property.
The biggest advantage to tenants in common is that your share in the property can be left in a will and passed onto a loved one. If you do not have a will the interest in the property will be passed through the rule of intestacy.
If you are a first-time buyer or you are buying a property with a partner or loved one our Conveyancing team at Johnson Astills can assist you and provide you with further information regarding any conveyancing queries. Please contact us at our Leicester Office or Loughborough Office on 0116 2554855 or 01509 610312