We regularly advise clients on the issue of joint property and how it is owned. This blog is intended to offer some guidance to joint property owners when going through a separation.
Generally married couples and those who purchase properties together will do so as joint tenants. This means that the Law of Survivorship applies and the owners are, effectively, treated as being one.
If one of the joint owners dies whilst the property is owned as joint tenants, their share of the property automatically passes to the other irrespective of what their Will says.
Furthermore, joint owners can only raise mortgages or loans against the property by agreement with the other owner and such charges apply to the whole property rather than to individual shares of the property.
Tenants in common
The alternative way to own a property is as tenants in common which means that the owners (potentially two or more in number) each own a specific share. These shares may be in equal portions or, where appropriate, unequal.
The big difference with tenants in common is that on the death of any of the owner(s) their share does not pass to the other owner(s) automatically but passes according to their Will or estate.
The benefit being that the owner can then decide exactly who their share is to go to which, in divorce, is rarely their spouse. It is also possible for the owners to charge their shares of the property (i.e. with secured loans or mortgages) without impacting on the other owner’s shares.
Severing the joint tenancy
An owner of a property held as joint tenants can sever a joint tenancy to hold as tenants in common at any time by serving notice on the other party and the other owner(s) cannot prevent this from happening. Once severed, the property is held as tenants in common in equal shares. This would then mean that, on the death of any owner(s), that person’s share would pass according to their estate or Will and would no longer pass to the other automatically.
It is often advisable for people going through divorce proceedings or a separation to consider severing the joint tenancy. This is because it allows them to take control of their share of the property whilst negotiations continue in relation to the division of the family finances. It will also assist by ensuring that at least their equal share does not end up being passed to their spouse/ex-partner as a result of their death.
The only proviso to the above is that it may be worthwhile considering whether this is a sensible option in all circumstances. For example, when both parties are relatively young and in good health, it may be more of an advantage to leave the joint tenancy in place to ensure each joint owner would still receive their spouse’s/ex-partner’s share of the property automatically in the event of their (unexpected) death. That said, before deciding whether or not to sever a joint tenancy, it is always worthwhile considering the options in detail with a solicitor.
If you would like to discuss this issue or any other family related matter, then please contact our Family team to make an appointment.
Chalfont St Giles: 01494 870075 | Great Missenden: 01494 923923 | Stone: 01296 747151