What is joint tenancy?
Joint tenancy is a type of ownership where two or more people are equal owners of a property.
When you enter into a joint tenancy mortgage, all tenants have equal rights to the property and each tenant owns the whole property. This means that if one wants to sell, the others must agree.
What’s more, if one of the tenants were to die, their share of the property would pass to the remaining tenant or tenants. You cannot leave your share of the property to someone else in your Will.
All owners will be responsible for keeping up with the mortgage repayments, so if one tenant can’t pay, the remaining tenants must cover the shortfall.
Who is joint tenancy suitable for?
Joint tenancy is ideal for married couples or couples who intend to get married.
A joint tenancy mortgage could also be suitable for siblings or family members who want to make a joint investment.
What is the difference between joint tenancy and tenants in common?
The main difference between joint tenancy and tenants in common relates to the nature in which the property is owned by the tenants, and what happens if one of the tenants dies.
Joint tenants own a property in equal measure. If one of the tenants were to die, their share of the property automatically passes to the remaining tenant or tenants. If joint tenants want to sell the property, all tenants must agree.
Tenants in common is different, as each tenant owns a share in the property and there is no legal requirement for the share to be equal. If one of the tenants in common were to die, their share of the property would pass to whoever they have chosen as a beneficiary (as outlined in their Will).
What is ‘severance of joint tenancy’?
It is possible to change ownership from a joint tenancy to a tenants in common. You can do this without the other owners’ agreement.
To do this you need to serve a written notice of change, or a ‘notice of severance’, and make an application to the HM Land Registry. You need to apply for a ‘Form A restriction’ or you can make the application through a solicitor. Find all the information you need here.
Things to consider before entering a joint tenancy
Taking out a joint tenancy mortgage with someone is a big commitment so it’s important that you trust your joint owner. You also need to sit down and discuss what would happen if one of you were unable to meet the mortgage repayments or what would happen if one of you wanted to sell the property and the other one didn’t.