When it comes to purchasing property with someone else, there are two main ways to own that property: as joint tenants or as tenants in common. Both types of ownership have their pros and cons, and it’s important to understand the differences so you can make an informed decision about which is right for you.
Joint tenancy is a type of co-ownership where all owners have equal rights to the property. When one owner dies, their share automatically passes to the remaining owners. This is known as the right of survivorship, and it means that the last surviving owner will inherit the entire property. Joint tenancy is often used by married couples or family members who want to ensure that their property passes directly to their partner or children without the need for probate.
Tenancy in common, on the other hand, is a type of co-ownership where each owner has a specific share of the property. These shares can be equal or unequal, and they can be bought or sold independently of the other owners. When one owner dies, their share passes to their heirs according to their will or state law. This means that the property can be inherited by multiple people, and it may need to be sold or divided among them.
So which is better: joint tenancy or tenancy in common? The answer depends on your individual circumstances and goals. Here are some factors to consider:
- Estate planning: If you want to ensure that your property passes directly to your partner or family members without the need for probate, joint tenancy may be the best option. However, if you have specific wishes about how your share of the property should be distributed after your death, or if you want to leave your share to someone who is not a joint tenant, tenancy in common may be a better choice.
- Ownership structure: Joint tenancy is often used by married couples or family members who want to own property together. However, if you are buying property with a business partner or friend, tenancy in common may be a better option because it allows you to have separate ownership interests and responsibilities.
- Financial considerations: If you are buying property with someone who has significantly more or less money than you do, tenancy in common may be a better choice because it allows you to divide ownership shares based on how much each person contributed. With joint tenancy, all owners have equal rights and responsibilities, regardless of how much they contributed.
- Management and control: Joint tenancy requires all owners to make decisions together, which can be a disadvantage if you have different ideas about how to manage the property. With tenancy in common, each owner has the right to manage and control their own share of the property, which can be beneficial if you want more control over your investment.
Ultimately, the decision to buy property as joint tenants or tenants in common depends on your individual circumstances and goals. It’s important to speak with one of our conveyancing solicitors, or financial advisor before making a decision to ensure that you fully understand the implications of each type of ownership.
Please call us to discuss this or any other property issues. Our conveyancing department would be happy to speak to you during working hours on 0161 850 9911 or at propertyteam@khanmather.co.uk