Joint Tenants and Tenants in Common Explained

There are many complicated terms and legal factors to contend with when you want to purchase a property, which is part of the reason why it is so easy to make mistakes.  

In order to avoid additional costs or issues further down the line, it’s important that you understand some of the legal jargon, or at least seek help from someone who does.  

If you’re purchasing a property with someone else, one of the legalities that you will need to think about is whether you want to own the house or flat as ‘tenants in common’ or ‘joint tenants’. Knowing the difference between the two is crucial, as it can impact the financial decisions you make later on.  

Not all circumstances are the same, and your decision will depend on a variety of factors, including who you are purchasing the property with and your relationship with them.  

Here, we outline what tenancy in common and joint tenancy agreements mean, as well as how it might impact you and your will. 

What is joint tenancy? 

A joint tenancy agreement means that you and the person you’re buying the house with will own the entirety of the property equally, rather than just a specific portion of it.  

If you purchase the property as joint tenants and eventually decide that you want to sell it, both owners will be entitled to receive half of the value, regardless of whether one person has paid more into the house than the other.  

As joint tenants, sometimes referred to as ‘beneficial joint tenants’: 

  • Both property owners have equal rights to the whole property  
  • If one tenant dies, the property automatically goes to the other owner 
  • You are unable to pass on your ownership of the property within a will 

Learn more: What Happens if You Die Without a Will?

What happens when a joint tenant dies? 

The surviving owner automatically receives ownership of the entire property if the other joint tenancy passes away – this is known as the right of survivorship. 

The right of survivorship will outweigh your will if you state within it that you would like to leave your share of the property to someone else. 

If you have a joint tenancy agreement, your share of the house you purchase will always be left to the other purchaser if you pass away, so it’s a major commitment to make. 

Joint tenancy agreements are useful options for people who are guaranteed to leave their share of the property to the other co-purchaser, such as married couples or long-term partners.  

If both joint tenants pass away at the same time, it’s important that a legally valid will has been put in place to determine how the property should be distributed among beneficiaries. Without a will, the property (and the rest of your estate) will be shared out in accordance with the rules of intestacy.  

These intestacy rules will not consider your personal preferences or wishes, and the house may fall into the wrong hands.  

It is therefore important that you and the person you purchase the house with have wills in place, ideally identical mirror wills

Note: If you have a child with a former partner and get a joint tenancy agreement with someone else, it may be difficult for your child to inherit the property if you pass away. 

You might like: Talking to Your Family About Your Will

What is tenancy in common? 

Unlike joint tenants, tenants in common both own a specified share of the property that they purchase, usually 50% each (although this isn’t set-in-stone and percentages can differ). 

Both co-owners are entitled to pass on their portion of the property however they like, as long as it is stated within a legally-binding will, along with your chosen beneficiaries. 

Tenancy in common agreements are useful under a variety of circumstances, including: 

  • If you want to co-own the property with your spouse or partner 
  • If you and your partner want to leave your share of the property to different people when you die 
  • If you or your current partner have children from a previous marriage (they will be able to inherit your share if you include them in your will) 

So, what happens if one co-owner passes away under a tenancy in common agreement? 

If you pass away with a tenancy in common agreement in place, your share of the property will be inherited by whoever you leave it to in your last will and testament. 

If you don’t have a valid will in place, your percentage of the property ownership will be inherited in line with the rules of intestacy, which may not represent your personal wishes.  

This is why we recommend setting up a legally binding will in order to protect your finances and your loved ones. 

Learn more: Making a Will at Home Without a Solicitor

Writing a will at Unite Wills  

Regardless of the tenancy agreement you have in place, it’s always worth setting up a will to make sure your hard-earned assets go exactly where you want them to when you’re no longer here.

With a will in place, you will have peace of mind in knowing that your finances and your beneficiaries will be protected by a legally binding document.

Here at Unite Wills, our experts are able to advise you and help you create a will online with little hassle. To get started now, register with us for free by tapping the button below:

Make Your FREE Will Today

Get Started Now