When you buy a property jointly you need to decide how you will hold the legal title. There are two ways in which to do this:
Firstly, Joint Tenants
If you opt to hold the property under a joint tenancy, the legal title to the property is held in the names of both of you. In the event of one of you dying, then the deceased person’s share in the property would pass automatically to the survivor, regardless of the terms of any will or the rules of intestacy.
Secondly, Tenants in Common
If you opt to hold the property under a tenancy in common, then again, the legal title is held in the names of both of you. However, you will each own an individual share in the property which may either be equal or in agreed percentage shares. Upon the death of one of you, the deceased person’s share in the property would pass under the terms of his/her will or under the rules of intestacy if no will has been left.
If you wish to hold the property in unequal shares, then we advise you to have a Declaration of Trust drawn up recording the terms of the agreement between you in relation to the division of the proceeds of sale. We would also recommend that you consider making Wills specifying how you want your share of the property to be dealt with and setting out any rights of the survivor to remain in the property. We have a specialist department who would be happy to discuss making a Will.
If you do enter into a Declaration of Trust together, it is very important that you both bear in mind that it will remain binding upon you and could be enforced by either one of you. Should your financial circumstances change at all in the future, it is important that you consider whether a new Declaration of Trust should be put in place.
If you are looking at purchasing a property or wish to change ownership of your current property and need guidance on the next steps , contact our friendly and experienced Residential Conveyancing team on 01904 624903.