« Back to News

What different ways can two (or more) people buy property together?

22 November 2019

Purchasing a house, flat or land with your partner, friend or a family member is a huge commitment. It is important to take practical advice from your lawyer in order to make the right decision on how co-owners wish to own their property.

Buying a property with someone else is called joint ownership. The two forms of joint ownership are joint tenants or tenants in common. 

Joint Tenants 

The first form of ownership is known as joint tenants. This means the property is held equally by the parties.   When the first owner dies the remaining co-owners (s) will automatically inherit the property. This happens regardless of what is stated in your Will.

Tenants in Common 

The second form of ownership is tenants in common. This means the parties will have separate shares. This type of ownership may be useful for couples who are buying together but are not married or those who have contributed unequally in respect to the property purchase.  

When co-owners hold the property this way the share of the deceased's property will pass under their Will. In the event there is no Will the share in the property will be inherited according to intestacy law which can have unexpected consequences. Click here for further guidance on what happens if you die without a Will. This is why it is important to make a Will when you buy a property.

Declaration of Trust 

When property is owned as tenants in common the owners can sign a Declaration of Trust. This is a deed which declares the interests of the parties involved. Shares can be fixed i.e. a percentage share; or floating i.e. the percentage can change depending on contributions to bills or home improvements. 

The deed may include provisions in connection with:

• contributions made to the deposit 
• contributions made to the purchase price
• how the parties will share the net proceeds of sale 
• responsibilities for mortgage payments
• responsibilities for utility bills 

 

A Declaration of Trust can be a useful document when a relationship comes to an end because the deed clearly sets out the responsibilities of the parties. Your property lawyer can advise you about how a Declaration of Trust could be tailored to your particular circumstances.

This article provides general guidance, however if you wish to obtain independent legal advice on any joint ownership query please do not hesitate to contact our property teams located at our Winton office in Bournemouth on 01202 526343 or our Highcliffe office on 01425 282150.

This is not legal advice; it is intended to provide information of general interest about current legal issues.

 

 

---

Further Information