OWNING a property on your own can be a daunting enough experience. Owning one jointly can bring all kinds of issues.
But help is at hand thanks to the experienced team at Ashton-under-Lyne solicitors Bromleys.
And they have produced a handy guide telling you how to avoid any outfalls and get the most out of joint ownership.
Owning a property together in the UK: A comprehensive guide
ARE YOU thinking about buying a property with someone else?
Whether it’s with a partner, family member, or friend, joint property ownership in England can be an exciting venture.
However, it is crucial to understand the legal and financial aspects of such a purchase to prevent potential conflicts in the future.
Beverley Pretl, solicitor in the residential conveyancing department at Bromleys Solicitors, explores what you need to know about the different ways to own a property with someone else in England.
What are the ways to own property together?
In England, there are two main ways in which multiple people can own a property:
Joint Tenants
JOINT tenancy means that all owners have equal rights to the entire property.
If one owner passes away, their share automatically transfers to the other owner(s) through the right of survivorship.
This means the property cannot be passed on through a will.
Key features of joint tenancy:
Equal ownership regardless of financial contribution
Automatically passes to the surviving owner(s)
Cannot leave a share to someone in a will
Requires mutual consent to sell or transfer the property
Tenants in Common
WITH tenants in common, each owner holds a distinct share of the property. The shares can be equal or unequal, depending on the financial contributions of each party. Unlike joint tenancy, there is no right of survivorship, meaning an owner’s share can be passed on through a will.
Key features of tenants in common:
Ownership shares can be different
Each owner can pass their share to someone else in a will
Can be useful for protecting individual investments
May require a Declaration of Trust to formalise ownership shares
Key considerations before buying together
FINANCIAL contributions and ownership shares: It’s essential to discuss how much each person will contribute to the deposit, mortgage payments, and ongoing expenses.
If you are purchasing the property as tenants in common, a Declaration of Trust may be necessary to clearly outline the ownership shares.
Mortgage Arrangements: If you are taking out a mortgage together, all owners will be jointly responsible for repaying the loan.
This means that if one person fails to pay their share, the lender can seek full repayment from the other owner.
Legal Agreements: A cohabitation agreement or declaration of trust can help avoid disputes by clearly outlining each person’s rights and responsibilities, including:
What happens if one person wants to sell their share?
How to handle financial contributions
What happens if there is a dispute?
Whether one owner has the right to buy out the other party
How the shares are valued
What happens if one party stops contributing financially?
Stamp Duty and other costs.
When purchasing property jointly, it’s important to consider Stamp Duty Land Tax (SDLT).
Higher rates may apply if any owner already possesses another property. Budgeting for these costs is essential to ensure you’re not blinded by unforeseen costs.
How can Bromleys Help?
OWNING a property together in England is a great way to step onto the property ladder, but it is essential to understand the legal and financial implications.
Choosing between joint tenants and tenants in common will affect your rights and how the property is passed on in the future.
Taking legal advice and setting up agreements in advance can help protect everyone involved and ensure a smooth co-ownership experience.
If you would like to know more about how our property team can assist you, then please call Bromleys on 0161 884 8720 or email bromleys@bromleys.co.uk.