Joint ownership with a partner or friends is popular with people who want to get on the property ladder but can’t afford to buy on their own. Joint owners can be joint tenants or tenants in common. You may also have a joint mortgage. There are implications and obligations depending on the options you choose that you need to understand before you commit and make the most out of getting into the property market.
Here are our Top Tips on joint property ownership.
1 Joint Tenants
Joint tenants have equal shares in the whole property. This is the most common arrangement for partners. Neither partner can sell the property or raise a mortgage or loan against the home without the other.
2 Tenants in Common
Up to four tenants in common separately own a share of property. Those shares might not necessarily be equal shares and could be based on the original contribution to the purchase price. This is a common arrangement where friends get together to buy a property. A declaration should be drawn up outlining the extent of each person’s share. Check this document carefully to ensure it is correct from the outset.
3 Inheritance Implications
If either joint tenant dies the other automatically inherits their share, despite what their Will might say. If one of the tenants in common dies their share will be passed to their next of kin rather than the other owners. Tenants in common should ensure that they have an up to date Will to ensure that their share passes to the right person if the worst were to happen.
4 Joint Mortgages
Both parties must give permission for any sale, re-mortgage or loans secured on the property. If one party stops paying their share of a joint mortgage the other party or parties will be expected to make the payment.
5 Joint Ownership Agreements
A legally binding agreement will protect your investment and ensure that all parties are clear about their rights and obligations. Relying on understandings or verbal agreements is risky.
Agreements cover details such as how the property will be valued if one or more partners wants to sell, what happens if somebody dies, dispute handling, maintenance costs and renting of spare rooms.
It is important to seek specialist legal advice. Joint ownership agreements are available to futureproof your arrangements. The specialist team at Powells can guide you through this process to ensure that the arrangements you put in place at the beginning properly reflect your wishes. Contact us today for help and support.
